Dow Jones Industrial Average churns post-PPI print

• The Dow Jones tested higher ground after US producer inflation chilled in December.
• Despite an uptick in investor sentiment, markets are still apprehensive.
• Investors await Wednesday's key CPI inflation print before making decisions.

The Dow Jones Industrial Average (DJIA) lurched around 150 points higher on Tuesday after Producer Price Index (PPI) inflation printed below median market forecasts. Treasury yields ticked down and equities explored the higher end after cooling inflation pressures gave investors a reason to look forward to key Consumer Price Index (CPI) inflation figures due on Wednesday. The bid in equities was short-lived, and the Dow Jones is now sinking back below Tuesday's opening bids and exploring the 42,200 handle once again.

PPI inflation figures eased broadly below expectations in December, with headline PPI printing at just 0.2% MoM. Investors were expecting a downtick to 0.3% from the previous 0.4%. Core PPI, excluding price increases in volatile food and energy prices, was flat in December versus the forecast of 0.3% and 0.2% last.

Annualized PPI inflation tells a slightly different story: headline PPI inflation rose to 3.3% YoY versus the previous figure of 3.0%, while core PPI accelerated to 3.5% YoY compared to the previous 3.4%. While both figures came in below expectations, the print wasn't quite the boon to investor sentiment that many were hoping for as inflation pressures continue to simmer away in the background, albeit at a slightly lower boil than economists forecast. With inflation metrics still trending well above annualized Federal Reserve (Fed) targets, PPI figures printing below forecasts is a distinction without a difference when it comes to expectations of interest rate decreases.

Dow Jones news

Roughly half of the Dow Jones board is in the green on Tuesday, though steeper losses in key favorites are keeping the overall index slightly underwater for the day. Boeing (BA) backslid around 3%, falling to $165 per share after the aerospace manufacturer reported fewer customer deliveries than analysts expected. Boeing is slated to release its latest earnings report on January 28.

Salesforce (CRM) and Caterpillar (CAT) are two of the big winners on the Dow, rising around 1.5% apiece as investors continues to pivot out of tech favorites and bid up adjacent-industry familiars. CRM is knocking on $324 per share while CAT is trading into $368 per share.

Dow Jones price forecast

The Dow Jones is discovering some chart churn as bidders look to dig in some footholds above the 42,000 major price handle. The major equity index has backslid 7.4% top-to-bottom from record bids near 45,070 set in late November. Bulls are struggling to catch the backslide as the 200-day Exponential Moving Average (EMA) comes into view, and price action is poised to tap the key long-term average for the first time since November of 2023.

The immediate barrier to a technical recovery will be the 50-day EMA falling into 43,040. A near-term technical floor appears to be firming up at 42,000, but a fresh push into the low end could see supports snap.

Dow Jones daily chart