The Dow Jones Industrial Average (DJIA) is facing resistance as it tries to surpass the 41,000 mark, with US Producer Price Index (PPI) inflation data hinting at a possible Fed rate cut in the upcoming week. Despite a slight uptick in PPI inflation numbers and a rise in US Initial Jobless Claims, the Fed is expected to proceed with a 25 bps rate cut on September 18.
In August, US PPI rose to 0.2% MoM, with core PPI accelerating to 0.3% MoM. While the monthly figures showed a slight increase, the annualized PPI inflation numbers were below expectations, easing to 1.7% YoY for headline PPI and holding steady at 2.4% YoY for core PPI. At the same time, US Initial Jobless Claims rose slightly to 230K for the week ended September 6.
Market analysts anticipate a rate cut from the Fed next week, with over 80% odds of a 25 bps reduction. The Dow Jones struggled at the start of Thursday’s trading session but saw a late rally, with only a third of the index in the red. Dow Inc (DOW) led losses, while Caterpillar Inc (CAT) made gains.
Overall, the Dow Jones is hovering below 41,000, but recent bullish momentum suggests a potential breakthrough. The index has been consolidating below 41,000 for the past six trading days, but a bounce from the 50-day Exponential Moving Average (EMA) at 40,366 indicates a positive trend.
Dow Jones Price Forecast
The Dow Jones is poised for a potential breakout above 41,000, supported by recent bullish momentum and a bounce from the 50-day EMA. While the index has faced resistance at the key price level, ongoing market conditions suggest a bullish bias in the near term.
Dow Jones Daily Chart
Investors should keep a close eye on the developments in the Dow Jones as it approaches the critical 41,000 level amidst Fed rate cut expectations and market volatility. Understanding the impact of PPI inflation data and jobless claims on the index’s performance can help individuals make informed decisions about their investments and financial strategies.