Dow Jones Industrial Average bolstered by consumer sentiment despite earnings declines

• The Dow Jones is struggling to stay in the green as it wraps up a wobbly trading week.
• UoM Consumer Sentiment Index figures showed US consumers are recovering from April's tariff tilt.
• Key earnings misses on Friday are dragging the major equity index down for the day.

The Dow Jones Industrial Average (DJIA) wobbled on Friday, testing fresh weekly highs on consumer sentiment and inflation expectations data. However, the Dow backslid after earnings misses in key overweight companies dragged the index sharply lower to round out the trading week.

The University of Michigan's (UoM) July Consumer Sentiment Index showed another recovery in aggregated survey responses, with the index climbing to 61.8 from 60.7. 1- and 5-year Consumer Inflation Expectations also eased on Friday, with the one-year lookahead slipping to 4.4% from 5% and the 5-year inflation outlook falling to 3.6% from 4%.

Key earnings beat the street, but shares still fall

Q2 earnings week wrapped up on Friday, with downside in key heavyweight companies dragging the Dow lower. Both 3M (MMM) and American Express (AXP) fell by more than 3% post-earnings despite beating headline forecasts. 3M cleared earnings and revenue expectations, but a 2.2B quarterly expenditure on legal fees, and investors are concerned that more court costs could be on the horizon.

American Express also beat headline growth and profit expectations, but investor concerns are growing that the credit company will face firm headwinds moving forward. FX market volatility and exchange rates, rapidly evolving digital payment alternatives, and trade frictions from tariffs all threaten American Express's bottom line.

Dow Jones price forecast

Friday's downside momentum has put the Dow Jones within touch range of the trading week's opening bids, with the major equity index trading within 0.1% of Monday's initial prices. The Dow is struggling maintain a foothold at the 44,500 region, and lack of sustained bullish momentum could see the DJIA extend into the bearish side as technical oscillators continue to ease back into the midrange.

Dow Jones daily chart