Dow Jones Industrial Average looks for bullish footing on Wednesday

• The Dow Jones rebounded on Wednesday, briefly tapping 46,800.
• Equities are struggling to shake off a brief spat of risk aversion over the ongoing US shutdown.
• The AI rally continues to cough and sputter, but key hardware providers for the LLM segment still defy gravity.

The Dow Jones Industrial Average (DJIA) tilted back into the bullish side on Wednesday, recovering recently lost ground and retesting the 46,800 level as major indexes look to reestablish their top-heavy stance. Investors continue to shrug off the ongoing US government shutdown; however, several failed attempts to jumpstart federal operations on the Senate floor on Wednesday kept investor apprehension close to the surface.

The Federal Reserve's (Fed) latest meeting Minutes confirmed that several Fed officials have indeed shifted lower on the dot plot, with policymakers generally acknowledging "downside risks" on the labor side of the Fed's dual mandate. Despite a steeper curve in rate cut expectations from Fed voters, the Fed's Gross Domestic Product (GDP) outlook through 2028 was revised higher.

According to the CME's FedWatch Tool, interest rate expectations shifted slightly lower after the release of the meeting Minutes from the Fed's interest rate decision in September. Rate markets are still pricing in over 92% odds of a follow-up interest rate cut on October 29, however widespread market hopes for a third straight interest rate trim on December 10 have come under threat. Fed Funds futures still see over 75% odds that the Fed will do a third straight cut in December, but odds are even higher that a third cut could be pushed out to January 2026.

With the Fed's meeting Minutes out of the way, and the US government's shutdown continuing to grind onward, investors will be looking ahead to this week's University of Michigan (UoM) Consumer Sentiment Index update due on Friday. The UoM survey index is expected to tick down to 54.2 from 55.1, and traders will be keenly watching UoM 1-year and 5-year Consumer Inflation Expectations for any signs that inflation worries may become entrenched.

Dow Jones daily chart