- Dow Jones climbed 0.4% as equities lean bullish to kick off the trading week.
- A late-day pullback on increased US borrowing crimped equity gains.
- Fed rate call slated for Wednesday.
The Dow Jones Industrial Average (DJIA) tested into the high side on Monday, with around two-thirds of listed securities on the major equity index finding the green as markets gear up for another Federal Reserve (Fed) rate call in the midweek. Another US Nonfarm Payrolls (NFP) Friday print looms ahead, and investors are tilting into the bullish side as markets continue to hinge focus on the possibility of rate cuts from the Fed.
Monday’s early gains gave way to a bearish wobble with the Dow Jones declining into 38,200.00 after the US Treasury cited lower cash receipts for larger borrowing estimates. Investors balked after US April-June borrowing estimates rose to $243 billion from the previous 202 billion.
The Fed’s latest rate meeting will begin on Tuesday and culminate in another rate call and press conference from Fed Chairman Jerome Powell on Wednesday. US Treasury yields are retreating and helping to bolster equities as investors lean into hopes of a softening stance from the US central bank. Rates are broadly expected to remain unchanged until September, with the CME’s FedWatch Tool showing rate markets expect around 58% odds a 25 basis point cut at the Fed’s September meeting. However, investors will be looking for signs of firming policy guidance from the Fed this week.
Fed Chair Powell to likely sound more cautious than usual – TD Securities
Friday’s NFP labor print will also provide key details for the state of the US economy in April. Markets currently expect Friday’s NFP to show 243K jobs additions for the month of April, down from March’s 303k print. March’s NFP jobs figure was the highest US employment gain since June of 2023.
Dow Jones news
Of the 30 securities that make up the Dow Jones, aboiut half of them were in the red on Monday, with Intel Corp. (INTC) leading the charge down, declining six-tenths of a point to $31.21 per share, falling around 2.1%. INTC was closely followed by Microsoft Corp (MSFT), which fell over five points to $400.33 per share, declining 1.5%. Boeing Co. (BA) shares climbed nearly six points to $172.60 per share, rising 3.4%, with Apple Inc. (AAPL) close behind, rising around 2.6% to trade into $173.70 per share.
Dow Jones technical outlook
The Dow Jones remains tepid on Monday, climbing to a slim high of 38,401.03 before a quick whipsaw back into the 38,200.00 region with the day’s bottom bids priced in near 38,205.58. Bullish momentum remains limited but determined as the DJIA grapples with the 200-hour Exponential Moving Average (EMA) at 38,297.23.
The Dow Jones is down around 4% from the last swing high just shy of the 40,000.00 major handle, bit the index is still trading safely into bull country, bidding north of the 200-day EMA at 36,725.68. The key long-run moving average has been provided a technical price floor for the Dow Jones since the index rose from last November’s bottoms near 32,800.00.
DJIA five-minute chart
DJIA daily chart
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