- The Dow Jones remained near the middle in a weak start to the new trading week.
- Stocks will remain on edge ahead of key inflation data.
- A new batch of US PPI and CPI inflation data is expected this week.
The Dow Jones Industrial Average (DJIA) returned to the middle on Monday, repeating last Friday’s stubborn mid-range after investors’ half-hearted attempts to spark a technical rally in the stock index fizzled out near key technical levels. Momentum is set to remain subdued as investors prepare for the wait for key mid-week Consumer Price Index (CPI) inflation figures due on Wednesday.
US Producer Price Index (PPI) business-level inflation figures are on the agenda for Tuesday, with markets expecting a continued easing of structural inflation pressures. Core PPI for the year ending July is forecast to ease to 2.7% from 3.0% previously.
Wednesday’s core CPI inflation is also expected to ease to 3.2% from 3.3% previously. Markets have locked themselves into an optimistic forecast scenario; if the CPI turns out too high, market sentiment will be affected. On the other hand, if the CPI turns out too low, it could trigger another fear-driven pullback, leaving a soft but not too soft inflation figure as the only upside option for stocks.
Dow Jones News
Two-thirds of the Dow Jones Industrial Average is lower Monday as investors search for meaningful support. Walmart Inc. (WMT) and Unitedhealth Group Inc. (UNH) each rose more than 1.5%, while losses were led by Procter & Gamble Co. (PG) and Boeing Co. (BA), each of which fell about 2% on the day.
Dow Jones Price Forecast
The Dow Jones traded lower on Monday, losing about a fifth of a percent as intraday price action struggles to find a grip on the 50-day exponential moving average (EMA) near 39,583.00. The index is still down about 5% from its all-time high of 41,371.38, but bidders stepped in to stop it from falling to the 200-day EMA at 37,962.00.
The nearly 7% top-to-bottom drop of the index that started at the beginning of the month unsettled investors, but the price action has recovered after finding a bottom near 38,382.00. Traders should expect a continued upside recovery above the 50-day EMA to challenge the main price zone of 40,000.00 again, but investors will be waiting for the results of the upcoming inflation data before jumping in fully.
Dow Jones daily chart
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.
