Dow Jones Industrial Average wobbles near record highs

• The Dow Jones opened on a cautious note despite opening near all-time highs.
• Fed rate cuts remain the key point of focus for equities.
• Investors continue to shrug off the ongoing government shutdown, at least for now.

The Dow Jones Industrial Average (DJIA) struggled to keep its footing on Monday, kicking off the new trading week opening at record highs above 46,800. The Dow slipped early on Monday after investors briefly showed frayed nerves, but general market sentiment continues to drift into the high side.

The Federal Reserve (Fed) is still firmly on pace to deliver a follow-up interest rate cut on October 29, keeping equity markets well bid as interest rate cuts remain a key point of focus for stock traders. Key economic datapoints have been suspended or delayed as a result of the US government's ongoing shutdown, which has extended into a second week. Lacking the latest Nonfarm Payrolls (NFP) jobs report, investors are running on the assumption that the Fed will be forced to make interest rate decisions on currently available data, which tilts in favor of more rate cuts.

It's a rate cut market, and we're all just trading in it

According to the CME's FedWatch Tool, rate markets are pricing in around 95% odds that the Fed will trim interest rates by 25 basis points on October 29, the closest to a sure thing that rate futures can provide. Rate traders are also pricing in over 80% odds of a third consecutive interest rate cut on December 10, but the long end of the tail has continued to extend, and rate odds currently place a fourth cut way out in April of 2026.

The economic data docket remains relatively mid-tier this week. The Federal Open Market Committee's (FOMC) latest Meeting Minutes will be released on Wednesday and will give investors a closer look at the Fed's internal dialogue from its last interest rate decision. Fed Chair Jerome Powell's avatar will also be making a public appearance on Thursday, when a pre-recorded message by the Fed head will be released during the Community Bank Conference in Washington, DC.

Dow Jones daily chart