Dow Jones hits new record high after Fed members’ comments

• The Dow Jones hit a new all-time high of 40,346.22 on Monday.
• Fed speeches continue to dominate market attention as traders await rate cuts.
• Rate markets see a 98% chance of a September rate cut according to the CME’s FedWatch tool.

He Dow Jones Industrial Average (DJIA) The dollar hit a new all-time high on Monday, hitting 40,346.22 before returning to the day’s opening range near 40,200.00 as markets continue to assess the odds of a future rate cut by the Federal Reserve (Fed). Fed Chair Jerome Powell on Monday gave a nod to recent progress in inflation data, helping to further stoke hopes for a September rate cut and prompting broad market considerations of an even earlier cut in July.

According to the CME’s FedWatch tool, rate markets are pricing in a 98% chance of at least a quarter-point cut in the federal funds rate when the Federal Open Market Committee (FOMC) meets on Sept. 18. Interest rate traders generally see the Fed keeping rates unchanged when the FOMC meets later this month on July 31. Still, some market participants particularly eager for rate cuts are pricing in around a 7% chance of an early quarter-point cut.

After a sharp slowdown in Consumer Price Index (CPI) inflation last week, which stoked a fresh spike in rate cut hopes, markets are pricing in a worrying rise in wholesale Producer Price Index (PPI) inflation. The next set of US economic data to watch will be Tuesday’s US Retail Sales, which markets expect to remain flat at 0.0% MoM in June compared to 0.1% in the previous month.

Dow Jones News

The Dow Jones is one of the best-performing major stock indexes on Monday, rising more than 200 points from low to high in Monday’s initial rally before returning to the day’s opening range near $40,200.00. About half of the DJIA’s constituent stocks are in the green for the day, with Caterpillar Inc. (CAT) up nearly 3% to $345.41 per share and up a stellar 54% from its 52-week low of $223.76 set in November of last year.

Nike Inc. (NKE) leads the losers on the Dow Jones Industrial Average, falling -2.2% to $71.80 per share on Monday. Nike Inc. continues to lose investor interest after the company revised down its forward guidance in the footwear maker’s latest earnings report. Nike shares have fallen -41% from last December’s peak of $123.39 per share, and have fallen below $72.00 per share for the first time since 2018.

Dow Jones Technical Outlook

The Dow Jones is holding near the 40,200.00 area on Monday after setting a new all-time high, and bidders are trying to keep the price action above the 40,000.00 area. The daily candlesticks continue to hold on the high side of the 200-day exponential moving average (EMA), which rises towards 38,000.00.

The Dow Jones has remained on the bullish side of its long-term moving average since breaking north of the 200-day EMA in early November, and the major stock index is up nearly 20% from last October’s low near 32,313.50.

Dow Jones five minute chart

Dow Jones daily chart