Market Data 
- Dow Jones cycles 38,700.00 after US labor preview eases.
- US ISM Services PMI accelerated to multi-month highs.
- Mixed data hinted enough softness to bolster rate cut hopes further.
The Dow Jones Industrial Average (DJIA) is treading water on Wednesday, grappling with 38,750.00. After US data printed mixed, rate cut expectations held on the high side but gains in the Dow Jones index remain limited.
US ADP Employment Change in May eased to 152K compared to the forecast 173K, and the previous month’s print also saw a downside revision to 188K from 192K. US ISM Services Purchasing Managers Index (PMI) jumped to a nine-month high of 53.8, well above the forecast 50.8 and vaulting over the previous 16-month low of 49.4.
Despite a healthy uptick in services activities, markets are focusing on the cooling effect of easing ADP labor figures. According to the CME’s FedWatch Tool, rate markets are pricing in 80% odds of a rate cut of at least 25 basis points at the Federal Reserve’s (Fed) September rate meeting.
Broader markets will be pivoting to look ahead to Friday’s upcoming US Nonfarm Payrolls (NFP) print, which is forecast to increase to 185K from the previous month’s 175K. With rate cut hopes pinning into the high side once more, investors will be looking for a softer NFP print and downside revisions to previous figures.
Dow Jones news
The Dow Jones is holding steady on Wednesday, with roughly half of the index’s stocks in the green during the midweek market session. Intel Corp (INTC) rose around 2.0%, climbing over $30.00 per share. On the low end, Cisco Systems Inc. (CSCO) tumbled -3.26% to $45.88 per share on Wednesday, falling to a new 52-week low as investors remain skeptical about the profitability of Cisco System’s newly-unveiled AI-driven ThousandEyes internet monitoring unit. Cisco’s ThousandEyes is billed as an internet-mapping and automated security tool.
Dow Jones technical outlook
Dow Jones is trading tightly near 38,700.00 on Wednesday as the major equity index struggles to share gains found by similar US indexes. The DJIA is struggling under the weight of near-term losses after tumbling from record highs above 40,000.00.
Daily candlesticks are knocking on a supply zone below 38,000.00, and long-term technical support is priced in at the 200-day Exponential Moving Average (EMA) at 37,297.33. The Dow Jones has arrest a near-term decline, but still remains down -3.35% from record high bids set in mid-May.
Dow Jones five minute chart
Dow Jones daily chart
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Last release: Wed Jun 05, 2024 12:15
Frequency: Monthly
Actual: 152K
Consensus: 173K
Previous: 192K
Source: ADP Research Institute
