The Dow Jones Industrial Average (DJIA) tested into a new all-time high on Monday, reaching a peak near the 40,000.00 mark. However, cautious tones are still prevalent in the market as Federal Reserve (Fed) officials continue to dominate headlines with their comments. Despite the optimism surrounding the new high, Fed officials remain concerned about inflation and the economy’s progress.
Last week, key inflation data fell slightly below expectations, prompting hopes for Fed rate cuts to increase. Although inflation numbers were better than expected, they still remain above the Fed’s 2% target. Fed officials are worried that inflation progress may be stalling out, leading to more caution in their policy outlook.
The upcoming release of the Fed’s Meeting Minutes from the Federal Open Market Committee (FOMC) is eagerly anticipated this week, along with other key economic indicators such as US Purchasing Managers Index (PMI) figures, New and Used Home Sales, and Durable Goods data. The CME’s FedWatch Tool indicates that rate markets are still pricing in a rate cut of at least 25 basis points at the September Fed meeting, but the odds of a cut are decreasing.
In terms of individual equities in the Dow Jones, JPMorgan Chase & Co. (JPM) is leading the losers lower on Monday, falling below $200 per share. On the other hand, Caterpillar Inc. (CAD) and Boeing Co. (BA) are among the gainers, with their shares rising. The Dow Jones technical outlook shows that despite the recent high, the index remains in bull territory and is up nearly 6% in 2024.
Overall, the Dow Jones may have reached a new high, but caution is still prevalent in the market. Fed officials are closely monitoring inflation and economic progress, and rate markets are still predicting a rate cut in September. Despite some fluctuations in individual equities, the Dow Jones remains in a positive trend and is trading above its 200-day Exponential Moving Average. Investors will be closely watching upcoming economic data releases and Fed commentary for further guidance on market movements.
