- The Dow Jones is steadily climbing towards record highs on Friday.
- U.S. markets are heavily banking on a 50 bps rate cut from the Fed.
- Mixed U.S. sentiment data continues to buoy investor optimism.
The Dow Jones Industrial Average surged for a third consecutive session on Friday, gaining around 350 points and nearing record highs above 41,500 as market sentiment increasingly leans towards rate cut expectations. The CME FedWatch Tool indicates a 45% probability of the Federal Reserve implementing a 50 bps rate cut during its September 18 meeting.
The University of Michigan’s Consumer Sentiment Index rose to 69.0 in September, marking a four-month high, as consumer outlook on the U.S. economy gradually improves. This boost in sentiment has bolstered rate cut expectations, despite a slight uptick in 5-year Consumer Inflation Expectations to 3.1%, up from 3.0%.
Additionally, the U.S. Export and Import Price Indexes for August declined more than anticipated. The Export Price Index contracted by -0.7%, significantly below the expected -0.1% and reversing the previous month’s 0.5% gain, signaling easing inflation pressures in trade. The Import Price Index also contracted by -0.3%, surpassing the forecast of -0.2% and down from July's 0.1%.
Dow Jones News
With equities buoyed by rate cut optimism, the Dow Jones Industrial Average is broadly in the green on Friday, with all but three of its constituent stocks rising to close out the week. Leading the gains are Caterpillar Inc. (CAT) and Home Depot Inc. (HD), both surging nearly 2% for the day. Caterpillar is testing levels above $346 per share, while Home Depot has broken above $381 per share for the first time since March.
Meanwhile, Boeing Co. (BA) is experiencing significant losses, plunging 3.5% to $157 per share, as the company faces its first worker strike in over 15 years.
Dow Jones Price Forecast
The Dow Jones is edging close to all-time highs, approaching 41,500, with a focus on the current record high of 41,574 from late August. The index has rallied nearly 4% over the past three days, rebounding from a dip below the 50-day Exponential Moving Average (EMA) and bouncing off support at 39,989.
Dow Jones Daily Chart
