- The Dow Jones continues its march towards new all-time highs, approaching 40,000 points.
- US CPI inflation fell in April, raising fresh hopes of a Fed rate cut.
- U.S. retail sales declined, bolstering hopes that the slowdown will push the Fed to cut rates.
Dow Jones (DJIA) rose on Wednesday, gaining three-quarters of a percentage point during the US trading session, after US Consumer Price Index (CPI) inflation retreated further. Market hopes that the Federal Reserve (Fed) will cut rates in the third quarter of 2024 have been revived as inflation continues to cool and economic activity retreats.
In April, US CPI inflation slowed to 0.3% monthly, compared to the expected 0.4%. The US core CPI also fell, meeting forecasts of 3.6% annually compared to 3.8% in the previous period. Inflation remains well above the Fed's 2% annual target, but the steady rise is raising market bets that the Fed will make its first quarter-point cut in September.
In April, US retail sales also fell faster than expected and remained stable at 0.0% monthly. The median market estimate expected US retail sales to decline to 0.4% from 0.6% previously, revised from 0.7%.
With inflation slowly approaching its targets and shaky domestic economic activity showing signs of weakness, investors are rushing to bet on a Fed rate cut. According to CME's FedWatch tool, rate traders are pricing in a 71% chances of a first rate cut of 25 basis points in September.
Dow Jones News
The Dow Jones index rose on Wednesday, although gains were slim compared to other U.S. indexes. About two-thirds of the stocks that make up the DJIA are in the green, as the rising tide of risk appetite lifts most boats.
Walt Disney Co. (DIS) continues to lose about -2.5% on Wednesday, falling to $102.74 per share after the company revealed softer-than-expected second-quarter results. On the positive side, Salesforce Inc. (CRM) rose 3.35% to $286.06 per share as analysts expect the stock to beat their already lofty expectations for annual growth of 12%.
Dow Jones Technical Outlook
The Dow Jones is rising on Wednesday, approaching all-time highs and the 40,000 point area. The DJIA continues to advance in a bullish streak that began after a slight decline near 37,500.00. The Dow Jones is about to close another day in the green, and has seen bullish momentum in all but one of the last ten consecutive trading days.
The bulls are in control, with the Dow Jones trading well above the 200-day EMA at 36,993.87 points. The DJIA is up almost 6% in 2024 and 18% since breaking the 200-day EMA in November.
Dow Jones Five Minute Chart
Dow Jones Daily Chart
economic indicator
Consumer Price Index (monthly)
Inflationary or deflationary trends are measured by periodically adding the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). CPI data is collected monthly and published by the U.S. Bureau of Labor Statistics. The CPI is a key indicator for measuring inflation and changes in purchasing trends. Generally, a high reading is considered bullish for the US Dollar (USD), while a low reading is considered bearish.
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Last post: Wed May 15, 2024 12:30
Periodicity: Monthly
Current: 0.3
Consensus: 0 ,4
Former: 0 .4%
Fountain: US Bureau of Labor Statistics
The US Federal Reserve has the dual mandate of maintaining price stability and maximum employment. According to this mandate, inflation should be around 2% annually and has become the weakest pillar of the central bank's directive since the world suffered a pandemic, which continues to this day. Price pressures continue to mount amid supply chain issues and bottlenecks, with the Consumer Price Index (CPI) at multi-decade highs. The Fed has already taken steps to contain inflation and is expected to maintain an aggressive stance for 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.
