The Dow Jones Industrial Average (DJIA) reached another record high after a positive PCE inflation print. The US Personal Consumption Expenditure Price Index (PCE) for August showed a 0.1% rise, with PCE inflation growing by 2.2% year-over-year, the lowest level since March 2021. This easing towards the Federal Reserve’s 2% target was welcomed by investors. In addition, the University of Michigan’s Consumer Sentiment Index for September also rose, reflecting positive sentiment among consumers.
Looking ahead, market watchers are focusing on next week’s Nonfarm Payrolls (NFP) report and Purchasing Managers Index (PMI) activity measures. The NFP report is expected to show strength in the US labor market, which could help ease concerns about a potential recession. Meanwhile, PMI business activity results are anticipated to provide further insights into the state of the US economy.
The Dow Jones saw significant gains on Friday, with most of its individual stocks trading in positive territory. Chevron led the charge higher, rising over 2% to above $145 per share. However, Amazon was among the few stocks that ended the day in the red, falling by 1.5%. Despite consistently breaking record highs, Dow Jones bulls are facing resistance, with potential pullbacks towards the 50-day Exponential Moving Average (EMA) at 40,930.
The PCE index is an important economic indicator that measures changes in the prices of goods and services consumed by US consumers. The YoY reading compares prices in the reference month to a year earlier and is the preferred measure of inflation for the Federal Reserve. A high PCE reading is considered bullish for the US Dollar (USD), while a low reading is bearish. The recent PCE inflation print easing towards the Fed’s target is seen as a positive development for the economy.
In summary, the Dow Jones reached another record high on the back of positive economic data, including a favorable PCE inflation print and rising consumer sentiment. With market attention turning to next week’s NFP report and PMI activity measures, investors are hopeful for continued strength in the US labor market and overall economic performance. Despite challenges faced by Dow Jones bulls in maintaining upward momentum, the overall sentiment remains cautiously optimistic.
