Dow Jones Industrial Average rallies on rate cut hopes, sets new all-time high
-
Dow
Jones
climbed
450
points
to
set
a
fresh
all-time
peak
above
40,200.00. -
Markets
are
broadly
shrugging
off
an
acceleration
of
US
PPI
wholesale
inflation. -
US
consumer
sentiment
surveys
worsened,
but
5-year
inflation
expectations
eased.
The
Dow
Jones
Industrial
Average
(DJIA)
soared
over
450
points
on
Friday
as
markets
piled
back
into
renewed
hopes
for
rate
cuts
from
the
Federal
Reserve
(Fed)
in
September,
even
as
US
Producer
Price
Index
(PPI)
wholesale
inflation
accelerated
faster
than
expected
in
June.
Markets
have
entirely
buried
the
needle
on
rate
cut
forecasts,
pricing
in
three
rate
cuts
in
2024
and
a
95%
chance
of
a
rate
trim
on
September
18.
The
Dow
Jones
eventually
settled
back,
ending
Friday
up
nearly
250
points
and
wrapping
up
the
trading
week
nearly
flush
with
the
40,000.00
major
price
handle.
June’s
US
core
PPI
wholesale
inflation
accelerated
to
3.0%
YoY,
entirely
eclipsing
the
forecast
2.5%,
and
the
previous
period’s
print
also
saw
an
upside
revision
to
2.6%
from
the
initial
2.3%.
Despite
the
sharp
uptick
in
producer-level
inflation,
markets
are
instead
refocusing
on
a
decline
in
Consumer
Price
Inflation
(CPI)
inflation
earlier
in
the
week
in
order
to
lean
firmly
into
rate
cut
hopes.
According
to
the
CME’s
FedWatch
tool,
rate
market
bets
of
at
least
a
quarter-point
rate
trim
at
the
Federal
Open
Market
Committee’s
(FOMC)
September
18
rate
call.
Rate
traders
are
also
now
pricing
in
at
least
three
rate
cuts
in
total
for
2024,
a
step
above
the
Fed’s
own
projected
one
or
two
rate
cuts
by
December.
Elsewhere
in
US
data
on
Friday,
the
University
of
Michigan’s
Consumer
Sentiment
Index
survey
stumbled
to
a
seven-month
low
of
66.0
from
the
previous
68.2,
undercutting
the
forecast
uptick
to
68.5
as
US
consumers
turn
increasingly
discouraged
about
the
economic
outlook.
UoM
5-year
Consumer
Inflation
Expectations
eased
slightly
in
July,
ticking
down
to
2.9%
from
the
previous
3.0%,
but
markets
are
putting
significant
effort
into
ignoring
how
much
higher
long-run
consumer
inflation
expectations
are
compared
to
the
Fed’s
target
annual
inflation
rate
of
2.0%.
Dow
Jones
news
Dow
Jones
soared a
scorching
450
points
on
Friday
at
its
peak
and
chalked
in
one
of
the
index’s
best
three-day
performances
for
the
year.
Over
two-thirds
of
the
Dow
Jones’
constituent
securitiese
ended in
the
green
on
Friday,
with
losses
led
by
JPMorgan
Chase
&
Co.
(JPM),
which
declined
-1.21%
and
fell
below
$205.00 per
share.
Despite
posting
better-than-expected
second-quarter
earnings,
the
stock
is
still
sliding
after
trading
into
all-time
highs
ahead
of
Q2
earnings.
JPM
notched
in
QoQ
profits
of
18.1
billion,
bringing
EPS
to
$6.12,
handily
beating
the
forecast
estimates
of
$5.88.
On
the
high
side,
Intel
Corp.
(INTC)
rose
nearly
3%,
climbing
into
$34.50
per
share
as
the
AI
market
rush
continues.
Intel
Chief
Technology
Officer
Greg
Lavender
noted
recently
that
he
anticipates
Intel
to
reach
$1
billion
in
annual
subscription
revenue
from
AI-related
cloud
computing
subscriptions
by
fiscal
year
end
of
2027.
While
the
growth
projection
in
AI
services
revenue
is
nothing
short
of
stellar,
and
is
helping
to
bolster
Intel
stock
even
higher,
the
figure
is
still
dwarfed
by
Intel’s
main
semiconductor
business,
which
routinely
pulls
in
revenue
in
excess
of
$50
billion
annually.
Dow
Jones
technical
outlook
Dow
Jones
tapped
into
a
fresh
all-time
high
of
40,260.24
on
Friday,
climbing
over
400
points
as
broader
markets
surge
higher.
DJIA
climbed
over
a
full
percent
through
the
last
session
of
the
trading
week,
and
the
Dow
Jones
is
now
up
over
6%
from
the
last
notable
swing
low
into
the
38,000.00
handle
in
late
May.
The
Dow
Jones
index,
posting
fresh
record
peak
bids,
is
now
up
6.82%
in
2024,
and
has
climbed
an
impressive
24.59%
from
the
index’s
swing
low
into
32,300.00
in
late
2023.
Daily
candles
are
trading
well
above
the
200-day
Exponential
Moving
Average
(EMA)
at
37,733.00,
and
bidders
will
be
looking
to
put
distance
between
bids
and
the
nearest
technical
floor
priced
in
at
the
50-day
EMA
near
39,095.00.
Dow
Jones
five
minute
chart
Dow
Jones
daily
chart
Dow
Jones
FAQs
The
Dow
Jones
Industrial
Average,
one
of
the
oldest
stock
market
indices
in
the
world,
is
compiled
of
the
30
most
traded
stocks
in
the
US.
The
index
is
price-weighted
rather
than
weighted
by
capitalization.
It
is
calculated
by
summing
the
prices
of
the
constituent
stocks
and
dividing
them
by
a
factor,
currently
0.152.
The
index
was
founded
by
Charles
Dow,
who
also
founded
the
Wall
Street
Journal.
In
later
years
it
has
been
criticized
for
not
being
broadly
representative
enough
because
it
only
tracks
30
conglomerates,
unlike
broader
indices
such
as
the
S&P
500.
Many
different
factors
drive
the
Dow
Jones
Industrial
Average
(DJIA).
The
aggregate
performance
of
the
component
companies
revealed
in
quarterly
company
earnings
reports
is
the
main
one.
US
and
global
macroeconomic
data
also
contributes
as
it
impacts
on
investor
sentiment.
The
level
of
interest
rates,
set
by
the
Federal
Reserve
(Fed),
also
influences
the
DJIA
as
it
affects
the
cost
of
credit,
on
which
many
corporations
are
heavily
reliant.
Therefore,
inflation
can
be
a
major
driver
as
well
as
other
metrics
which
impact
the
Fed
decisions.
Dow
Theory
is
a
method
for
identifying
the
primary
trend
of
the
stock
market
developed
by
Charles
Dow.
A
key
step
is
to
compare
the
direction
of
the
Dow
Jones
Industrial
Average
(DJIA)
and
the
Dow
Jones
Transportation
Average
(DJTA)
and
only
follow
trends
where
both
are
moving
in
the
same
direction.
Volume
is
a
confirmatory
criteria.
The
theory
uses
elements
of
peak
and
trough
analysis.
Dow’s
theory
posits
three
trend
phases:
accumulation,
when
smart
money
starts
buying
or
selling;
public
participation,
when
the
wider
public
joins
in;
and
distribution,
when
the
smart
money
exits.
There
are
a
number
of
ways
to
trade
the
DJIA.
One
is
to
use
ETFs
which
allow
investors
to
trade
the
DJIA
as
a
single
security,
rather
than
having
to
buy
shares
in
all
30
constituent
companies.
A
leading
example
is
the
SPDR
Dow
Jones
Industrial
Average
ETF
(DIA).
DJIA
futures
contracts
enable
traders
to
speculate
on
the
future
value
of
the
index
and
Options
provide
the
right,
but
not
the
obligation,
to
buy
or
sell
the
index
at
a
predetermined
price
in
the
future.
Mutual
funds
enable
investors
to
buy
a
share
of
a
diversified
portfolio
of
DJIA
stocks
thus
providing
exposure
to
the
overall
index.
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