Select Language

Dow Jones Industrial Average slips amid high US yields, Fed rate cut odds increase

Breaking news

Dow Jones Industrial Average slips amid high US yields, Fed rate cut odds increase

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.10.30 02:20
Dow Jones Industrial Average slips amid high US yields, Fed rate cut odds increase

update 2024.10.30 02:20

  • Dow Jones dips from 42,500 as US Treasury yields rise.
  • US job openings drop to lowest since January 2021, supporting rate cut bets.
  • Consumer Confidence jumps to 108.7, the highest since March 2021.
  • Boeing leads Dow gains, up 2.93% after share sale, while Chevron, Coca-Cola, and Home Depot lag behind, posting notable losses.

The Dow Jones Industrial Average (DJIA) trims off its Monday's gains, retreats from daily highs at around 42,500, and edges down over 0.25% while US Treasury bond yields cling to gains. US jobs market data augmented the odds that the Federal Reserve (Fed) will cut interest rates at the November meeting, while Consumer Confidence improved sharply.

US bond yields continued to rise, as the 10-year Treasury note yield rose three and a half basis points to 4.32% after the US Department of Labor revealed that job openings in the US tumbled to their lowest level in three and a half years.

US job vacancies slumped to 7.44 million in September from 7.86 million a month before, the fewest job openings since January 2021. At the same time, the Conference Board (CB) showed that Americans grew the most optimistic about the economy, as the index increased from 99.2 to 108.7, its most strongly gain since March 2021.

Following the data, the CME FedWatch Tool shows odds for a 25-basis-point (bps) rate cut by the Fed jumping to 98%, up from 96% a day ago. This would leave rates in the 4.50%-4.75% range.

Dow Jones news

The earnings season continued, and among the leading companies that compose the Dow Jones Industrial Average, McDonald's (MCD) reported earnings per share (EPS) of $3.23, above estimates of $3.20. Revenue was also above forecasts of $6.82 billion at $6.87 billion. Despite this, MCD clings to minuscule gains of 0.03% at $296.88 per share.

In the meantime, Boeing (BA) raised over $21 billion via its share sale on Monday, selling 112.5 million shares at $143.00 each as the company prepares to repair its balance sheet.

Following the shares sale, Boeing was the foremost leader in the session, gaining 2.93% at $155.10 per share, followed by Salesforce Inc (CRM), up 1.31% at $297.61 a share, and Cisco Systems Inc (CSCO) up 0.94% at $55.80. The laggard of the session was Chevron (CXP), losing 1.14% at $148.82; Coca-Cola Co. (KO), down by 1.27% at $65.82 a share; and Home Depot Inc (HD) edged 1.80% lower, down at $395.65.

Dow Jones price forecast

The Dow Jones consolidated just below the 42,350 area for the second straight day after forming an "inside day," which could have opened the door for further upside. However, the DJIA slipped below Monday's close, paving the way for further downside.

If sellers move in and push the DJIA below the October 25 swing low of 42,043, look for a test of the 42,000 mark. Up next lies the 50-day Simple Moving Average (SMA) at 41,879.

For a bullish continuation, the DJIA must clear the October 25 peak at 42,596. Once surpassed, the next resistance would be 43,000, followed by a record high at 43,322.

Momentum remains bullish as depicted by the Relative Strength Index (RSI), which pierced above its neutral line. This hints that buyers bought the dip and are eyeing higher levels.

Dow Jones daily chart

Dow Jones FAQs

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow's theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

 


Date

Created

 : 2024.10.30

Update

Last updated

 : 2024.10.30

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Mexican Peso plunges to new yearly low amid strong US Dollar

The Mexican Peso depreciated sharply against the Greenback on Friday and recorded new yearly highs of 20.29, above the former 20.22 peak late in the North American session, set to print weekly losses of over 1.50%.
New
update2024.11.02 07:31

Australian Dollar declines after high-tier US data, Chinese worries

.
New
update2024.11.02 06:40

NZD/JPY Price Analysis: Mixed technical outlook with sideways movement

Friday's trading saw the NZD/JPY pair continue its sideways movement of the past sessions.
New
update2024.11.02 05:49

Forecasting the upcoming week: US Presidential Elections overshadows Fed's decision

This past week, the US Dollar consolidated at around familiar levels, though it is set to snap four consecutive weeks of gains ahead of a busy schedule.
New
update2024.11.02 05:32

Dow Jones Industrial Average surges on soft US NFP data, Fed easing hopes rise

The Dow Jones Industrial Average (DJIA) posted solid gains of close to almost 300 points or 0.71% on Friday, on softer-than-expected economic data, reinforcing investors' hypothesis of further easing by the Federal Reserve.
New
update2024.11.02 04:04

US Dollar rebounds after NFPs and ISM PMIs

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, rebounded intraday despite the weak jobs data as annual wage inflation rose to 4%, indicating that inflationary pressures remain elevated.
New
update2024.11.02 04:00

Canadian Dollar mixed after US NFPs, ISM PMIs

The USD/CAD currency pair saw a mild decline in Friday's session, reaching a low of 1.3920.
New
update2024.11.02 02:10

GBP/USD Price Forecast: Climbs post weak US jobs report, eyes 100-day SMA

The Pound Sterling erased some of its Thursday's losses against the Greenback and rose 0.56% above its opening price after a dismal US jobs report reassured investors the Federal Reserve would continue to ease policy.
New
update2024.11.01 23:56

RBNZ: A high bar for a 75bps cut - Standard Chartered

We think the bar is high for a 75bps OCR cut given the prevailing economic backdrop.
New
update2024.11.01 23:56

EUR/CAD Price Prediction: Decisively breaks out of top of pattern

EUR/CAD rallies and pierces decisively above the slanting roof of the price pattern it had been trading in since the beginning of August.
New
update2024.11.01 23:40

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel