- The Dow Jones struggled to make gains on Tuesday, underperforming other indexes.
- Fed officials are cautiously leaning toward rate cuts, but more progress remains to be made.
- Key US data looms this week with Friday’s NFP on the horizon.
The Dow Jones Industrial Average (DJIA) was almost flat on Monday, despite a general increase in investor risk appetite after Federal Reserve (Fed) officials gave a thumbs-up to easing inflationary pressure in US economic data.
US JOLTS job openings in May rose slightly to 8.14 million MoM, beating the near-forecast of 7.91 million. A slight increase in available jobs helps ease tightness in the labor market, giving a boost to risk appetite as softer labor figures will help increase the likelihood of rate cuts by the Federal Reserve (Fed).
The Fed’s words have turned upbeat on the inflation outlook, helping to further improve overall market sentiment as markets head towards key economic figures scheduled for the rest of the week. Friday’s US Non-Farm Payrolls (NFP) loom on the horizon, with ADP employment change figures scheduled for Wednesday.
Dow Jones News
The Dow Jones Industrial Average was firmly mixed on Tuesday, with about half of the main stock index’s constituent stocks trading in the green on the day. Amazon.com Inc (AMZN) rose 1.5% to $200.25 per share, while Verizon Communications Inc. (VZ) fell -2.12% to $40.85 per share.
Economic indicator
JOLTS Job Openings and Labor Turnover Survey
The survey of job offers and labor turnover is carried out by the US Bureau of Labor Statistics to help measure job openings. It collects data from employers including retailers, manufacturers and individual offices each month.
Latest Post: Tue Jul 02, 2024 14:00
Frequency: Monthly
Current: 8.14M
Dear: 7.91M
Previous: 8.059M
Fountain: US Bureau of Labor Statistics
Dow Jones Technical Outlook
A sideways movement has plagued the Dow Jones Index since it returned to chart territory between 39,500.00 and the 39,000.00 area. A short-term technical ceiling is set at the latest high at 39,581.00, with the 50-day exponential moving average (EMA) providing an intraday price floor from 38,918.00.
The Dow Jones remains on the lower side of the all-time highs set just above the main price zone of 40,000.00 in May, and a slow recovery from the last major low at 38,000.00 threatens to run out of momentum.
Dow Jones five minute chart
Dow Jones daily chart
The Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indexes in the world, is made up of the 30 most actively traded stocks in the United States. The index is weighted by price rather than capitalization. It is calculated by adding up the prices of the component securities and dividing 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, as it only tracks 30 companies, unlike broader indexes such as the S&P 500.
There are many factors that drive the Dow Jones Industrial Average (DJIA). The main one is the aggregate performance of the companies that comprise it, as revealed in quarterly corporate earnings reports. US and global macroeconomic data also contribute, as they influence investor confidence. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA, as it affects the cost of credit, on which many companies rely heavily. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
Dow Theory is a method for identifying the major trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both move in the same direction. Volume is a confirmation criterion. The theory uses elements of peak-trough analysis. Dow Theory posits three phases of a trend: accumulation, when smart money starts buying or selling; public participation, when the general public joins the trend; and distribution, when smart money leaves the trend.
There are several ways to trade the DJIA. One is to use ETFs that allow investors to trade the DJIA as a single security, rather than having to buy shares of all 30 companies that comprise it. A prominent example is the SPDR Dow Jones Industrial Average ETF (DIA). Futures contracts on the DJIA allow traders to speculate on the future value of the index, and options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds allow investors to purchase a portion of a diversified portfolio of DJIA securities, providing exposure to the overall 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.
