Dow Jones Industrial Average steadies as markets digest Fed stance

• The Dow Jones holds steady near record highs after the Fed's rate cut this week.
• Investors have grown cautious, trimming their bullish momentum after a vigilant Fed showing.
• Odds of a third straight rate trim in December have declined significantly; focus shifts to January.

The Dow Jones Industrial Average (DJIA) held in place on Thursday, churning chart paper near record highs as investors reconsidered their stance following the Federal Reserve's (Fed) latest appearance. The Fed delivered a second straight quarter-point interest rate cut this week, as many broadly expected. However, a decidedly cautious appearance from Fed Chair Jerome Powell has dashed market hopes for a threepeat rate cut in December onto the rocks.

As noted by Fed Chair Powell during Wednesday's post-rate-cut press conference, the still-ongoing US federal government shutdown has dried up the flow of official data sources, specifically key inflation metrics and critical monthly labor data. Lacking the two main information streams that allow the Fed to perform its dual functions of controlling inflation and supporting employment, Fed Chair Powell warned that Fed policymakers may be forced back into a wait-and-see stance until official numbers can resume regular reporting.

Threepeat rate cut when?

With the Fed facing an inability to monitor the economy, market bets of a third consecutive rate cut on December 10 have faltered, with rate traders placing a much higher emphasis on the Fed's first policy meeting in 2026 for a third rate trim. If the Fed misses December's rate cut opportunity, investors will be hoping for a follow-up rate cut on January 28, with a few particularly begrudging rate betters seeing a third cut in March of next year.

Dow Jones daily chart