- The Dow Jones rose more than 350 points in volatile trading on Tuesday.
- Stocks found higher ground on Tuesday as U.S. inflation pressures ease.
- Following the release of the PPI, US CPI inflation remains in focus for Wednesday.
The Dow Jones Industrial Average (DJIA) found the accelerator on Tuesday, rising more than 350 points after the US Producer Price Index (PPI) inflation moderated more than expected in July. This gave stocks some breathing room and pushed the DJIA to 39,700.00.
US PPI inflation moderated to 2.2% year-on-year in July, falling below the expected 2.3% and declining further from the prior period’s revised 2.7%. Core PPI inflation also eased to 2.4% for the year ended July, falling below the 2.7% forecast and well below the prior period’s 3.0%. Continued declines in US inflation pressures boosted risk appetite in the US market session, with market bets for a double 50-basis-point cut in September by the Federal Reserve (Fed) rising to 55%, according to the CME’s FedWatch tool.
US Consumer Price Index (CPI) inflation is the key data of the week, scheduled for Wednesday. Core CPI inflation is expected to ease to 3.2% year-on-year from 3.3%. Markets have fully priced in at least a quarter-point cut by the Fed on September 18, and the continued decline in inflation gauges will likely trigger more bets on a double cut.
Dow Jones News
All but five of the Dow’s constituent stocks were in the green on Tuesday, with Walmart Inc. (WMT) falling -1.25% to $67.80 per share ahead of the retail giant’s latest earnings report scheduled for Aug. 15.
Nike Inc. (NKE) jumped 5.6% on Tuesday to $78.83 per share as the footwear maker sees its stock price rebound on what investors are calling “brand momentum” following a reorganization of production lines and the launch of new shoe models that are generating significant search interest. Nike recently took a hit after a worse-than-expected fiscal quarterly performance, sending shares tumbling from valuations above $90.00 per share.
Dow Jones Price Forecast
The Dow’s rally on Tuesday took the main stock index to a one-week high nearing 39,800.00 as bidders try to reclaim the key 40,000.00 price zone. The Dow recently fell to its lowest prices in weeks near 38,400.00 after being knocked off record highs near 41,400.00.
The DJIA is now trading back above the 50-day exponential moving average (EMA) for the first time since it dipped below the technical average in early August. Long-term trends still favor buyers, with the index continuing to trade north of the 200-day EMA at 38,166.00.
Dow Jones five minute chart
Dow Jones daily chart
Economic indicator
Consumer Price Index (YoY)
The CPI is published on US Labor Department and measures price movements by comparing retail prices of a representative basket of goods and services. The purchasing power of the dollar is diminished by inflation. The CPI is a key indicator for measuring inflation and purchasing trends. A reading above expectations is bullish for the dollar, while a reading below expectations is bearish.
Next post: Wed Aug 14, 2024 12:30 PM
Frequency: Monthly
Dear: 2.9%
Previous: 3%
Fountain: US Bureau of Labor Statistics
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
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.
