- The Dow Jones rose around 200 points on Thursday as the feeling continues to improve.
- The US IPP inflation was moderated faster than expected in April, but future risks remain.
- The results of the UOM feeling survey are ready for Friday.
The industrial average Dow Jones (DJIA) reduced the losses of early week and rose around 200 points on Thursday. The actions were driven by an inflation fact of the production price index (IPP) better than expected that showed that the effects of inflation on the top are still cooling at a faster rate than initially expected. Although risks based on tariffs for employment and inflation remain a constant concern, investors maintain the hope that the initial commercial conversations between the United States (USA) and China continue to develop in significant and more permanent suspensions of high tariffs in both directions.
The US IPP inflation cooled more than expected in April, with a contraction of business inflation of 0.5% monthly. The underlying inflation of the IPP in April also fell 0.4%, with annualized underlying business inflation decreasing to 2.4% year -on -year from 2.7% of the previous period. With both measures of the CPI and the IPP for April giving better inflation figures than expected this week, investors are allowed to hope that ongoing commercial conversations between the US and China avoid the worst of possible tariff damage.
The Trump administration withdrew the tariff weapon from its own head last weekend when it temporarily suspended its own 145% tariffs on all Chinese products, which led the Chinese government to do the same and terminate its own three -digit tariffs. The suspension of tariffs is only scheduled to last 90 days, which gives investors a break, but not enough to relax completely.
Inflation in cooling puts investors in a state of purchase, but the risks remain
Shares markets are expected to continue reasons to buy for now, but a series of possible winds against still stalc. Even with the 90 -day tariff respite of the Trump administration, import taxes on almost all goods destined for the US are much higher than in recent history. According to estimates of Fitch Ratings, the effective fee of tariffs (ETR) of the US will be globally exceeding 13% in 2025, compared to the ETR of 2.4% of 2024. ETR on Chinese goods specifically remains greater than 30%, even with the temporary suspension of retaliation tariffs. A strong increase in import taxes raises risks for both inflation and employment, and could trigger a period of “stagflation” in the US economy as Joe Cusick, senior vice president of Calam Investments:
“This is a market that has changed to a cautious optimism … As the fears of recession begin to decrease and the markets of shares demonstrate an underlying fortress. However, a series of macro and micro risks continue to form a ‘wall of concerns’ that investors must navigate.”
The last consumer’s feeling index of the University of Michigan (UOM) will be published on Friday. The medium forecasts of the market expect an increase in the results of the consumer survey, which has fallen for four consecutive months until reaching a minimum of two years of 52.2. Investors expect the feeling of the consumer to recover slightly and push the index again to 53.4.
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Dow Jones price forecast
The Dow Jones industrial average has recovered most of its soft losses in the middle of the week, but still remains below Monday’s peak of 42,410. The bullish impulse has managed to take Dow Jones above the 200 -day exponential (EMA) mobile average about 41,600, at least for now.
The bullish impulse is intended to continue while the fundamental factors continue to be stable. However, technical oscillators are showing strong warning signs that the price action is deeply anchored in overcompra territory, and is late for some type of technical correction.
Dow Jones daily graphics
Dow Jones Faqs
The Dow Jones Industrial Avenge, one of the oldest stock market indexes in the world, consists of the 30 most negotiated values in the United States. The index is weighted by the price instead of capitalization. It is calculated by adding the prices of the values that compose it and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, also founder of the Wall Street Journal. In recent years it has been criticized for not being sufficiently representative, since it only follows 30 companies, unlike broader rates such as S&P 500.
There are many factors that promote the Dow Jones Industrial Average (DJIA) index. The main one is the added performance of the companies that compose it, revealed in the quarterly reports of business benefits. The American and world macroeconomic data also contribute, since they influence investor confidence. The level of interest rates, set by the Federal Reserve (FED), also influences the DJia, since it affects the cost of credit, on which many companies depend largely. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
Dow’s theory is a method to identify the main trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Avenge (DJIA) and the Dow Jones Transportation Average (DJTA) and just follow the trends in which both move in the same direction. The volume is a confirmation criterion. The theory uses elements of maximum and minimum analysis. Dow’s theory raises three phases of the trend: accumulation, when intelligent money begins to buy or sell; Public participation, when the general public joins the trend; and distribution, when intelligent money abandons the trend.
There are several ways to operate with the DJ. One of them is to use ETF that allow investors to negotiate the DJ as a single value, instead of having to buy shares of the 30 companies that compose it. An outstanding example is the SPDR Dow Jones Industrial Avenge ETF (day). Future contracts on the DJ allow the specular operators about the future value of the index and the options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Investment funds allow investors to buy a part of a diversified portfolio of DJ values, which provides exposure to global index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
