- Dow Jones stuck to Thursday’s opening range after CPI inflation cools.
- Rate cut expectations pinned to the ceiling as price pressures ease.
- Market-wide pivot out of tech stocks limits gains from rate cut hopes.
The Dow Jones Industrial Average (DJIA) mostly stuck to familiar territory on Thursday, clipping into the high end after US Consumer Price Index (CPI) inflation came in below expectations and sparking an uptick in broad-market rate cut expectations in 2024. Despite easing inflation, a pivot out of tech stocks has kept equity indexes pinned close to flat during Thursday’s American market session.
June’s US CPI inflation broadly fell below forecasts, with annualized headline CPI inflation easing to 3.0% YoY from the previous 3.3% and falling even lower than the forecast 3.1%. CPI inflation actually contracted -0.1% MoM in June, falling back from the previous month’s flat 0.0% and below the forecast 0.1%.
US Initial Jobless Claims fell to 222K for the week ended July 5, down from the previous week’s revised 239K and improving from the forecast 236K. Thursday’s Initial Jobless Claims figure helped to push the four-week average down to 233.5K from the previous 238.75K.
With US CPI inflation cooling at an accelerated pace, market expectations for a rate hike from the Federal Reserve (Fed) are pricing in the possibility of three quarter-point rate cuts in 2024. According to the CME’s FedWatch Tool, rate market bets of a September rate cut have soared to 95%.
Dow Jones news
The Dow Jones looked for gains on Thursday, but topside momentum remained crimped as tech stocks declined, and concentrated losses in familiar technology names kept a lid on gains. 3M Co. (MMM) and Home Depot Inc. (HD) rose around 2.5% on Thursday, rising to $104.20 and $352.60 per share, respectively.
Intel Corp. saw a -4.24% decline, falling to $33.38 per share while Amazon.com Inc (AMZN) also backslid -3.0%, declining to $193.76 per share.
Dow Jones technical outlook
Dow Jones found slim gains on Thursday, but momentum remains stilted as the index tests the water of a supply zone priced in near the 40,000.00 major price handle. The Dow Jones has been slowly battling back into reach of all-time high bids sets just north of 40,000.00 back in May, recovering nearly 5% from the post-peak swing low towards 38,000.00.
Dow Jones five minute chart
Dow Jones daily chart
Economic Indicator
Producer Price Index (MoM)
The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).
