The Dow Jones Industrial Average (DJIA) is currently hovering around 38,700.00 as the US labor data preview has shown mixed results, leading to uncertainties about rate cuts. The US ADP Employment Change in May fell to 152K compared to the expected 173K, while the US ISM Services Purchasing Managers Index (PMI) surged to a nine-month high of 53.8, surpassing expectations. Despite the positive uptick in services activities, the focus remains on the cooling effect of softening labor figures, which has led to increased expectations of a rate cut at the Federal Reserve’s September meeting.
Investors are now looking ahead to Friday’s US Nonfarm Payrolls (NFP) data, which is forecasted to increase to 185K from the previous month’s 175K. With rate cut hopes on the rise, a softer NFP print could further solidify expectations of a rate cut. In terms of individual stocks within the Dow Jones index, Intel Corp (INTC) saw a 2.0% increase, while Cisco Systems Inc. (CSCO) fell -3.26% to a new 52-week low due to investor skepticism about the profitability of its new AI-driven internet monitoring unit, ThousandEyes.
The technical outlook for the Dow Jones index shows that it is trading near 38,700.00 and struggling to recover from recent losses. Daily candlesticks are approaching a supply zone below 38,000.00, with long-term support at the 200-day Exponential Moving Average (EMA) at 37,297.33. Despite a near-term decline, the index remains down -3.35% from its record highs in mid-May.
The ADP Employment Change indicator, released by Automatic Data Processing Inc., measures the change in the number of people employed in the US private sector. A rise in the indicator is usually seen as positive for consumer spending and economic growth, thus bullish for the US Dollar (USD). The recent data showed a decrease to 152K from the previous 192K, causing some concerns among investors about the overall labor market situation and its impact on the economy.
