The Dow Jones Industrial Average (DJIA) witnessed a bullish surge on Thursday as markets reopened following the Juneteenth holiday. Weakening US economic data, including declining Building Permits and the Philadelphia Fed Manufacturing Survey, added to investor hopes of an imminent rate cut by the Federal Reserve (Fed). Initial Jobless Claims also remained above expectations, further fueling rate cut expectations. The CME’s FedWatch Tool indicates a 70% chance of a Fed rate cut by September 18.
Despite recent economic data softening, the Fed remains cautious in its approach to rates. While unemployment claims fluctuate, the US job market remains strong, giving the Fed reason to wait for more subdued inflation figures before making any policy shifts. With US Purchasing Managers Index (PMI) figures still to come, investors are eager to see if the trend of cooling economic data continues.
In terms of individual stocks, Apple Inc. (AAPL) experienced declines on Thursday, while Salesforce Inc. (CRM) saw gains after announcing new AI-tech integrations. The Dow Jones index climbed to fresh highs on Thursday, testing levels close to the 40,000.00 mark. Chart patterns indicate a strong recovery from recent lows, with the index regaining ground above the 50-day Exponential Moving Average.
The Dow Jones Industrial Average, founded by Charles Dow, is a price-weighted index of the 30 most traded stocks in the US. Factors influencing the DJIA include company earnings reports, macroeconomic data, interest rates set by the Fed, and inflation metrics. Dow Theory, a method developed by Charles Dow, helps identify trends in the stock market by comparing the movement of the DJIA with the Dow Jones Transportation Average. Various trading methods, such as ETFs, futures contracts, options, and mutual funds, allow investors to trade the DJIA and gain exposure to the index.
