- The Dow Jones Industrial Average rose to 41,200.00 points after Federal Reserve officials said it was time to cut interest rates.
- Stock markets immediately began speculating on how many interest rate cuts there would be in 2024.
- Interest rate markets predict 100 basis point cuts by end-2024
The Dow Jones Industrial Average (DJIA) rose more than 400 points Friday after the Federal Reserve (Fed) gave the nod to upcoming interest rate cuts. Several Fed policymakers appeared before markets to signal the long-awaited policy shift that markets have been waiting for since at least December of last year, when investors initially priced in a staggering six interest rate cuts of more than 200 basis points by the end of 2024.
Read more: Jerome Powell reiterates that timing and pace of rate cuts will depend on data
Fast-forward to slow August, and investors are now grappling with whether the Fed will hike interest rates by 25 or 50 basis points in September. According to CME’s FedWatch Tool, interest-rate markets are pricing in a double-cut chance of about three to one on Sept. 18, while the rest of the rate-setting panel is still set on a single quarter-point cut. Bets on a 50-basis-point rate cut in September rose after Fed Chairman Jerome Powell, speaking at the Jackson Hole Economic Symposium on Friday, openly admitted that it was finally time for the U.S. central bank to start cutting benchmark rates.
Dow Jones News
It took a while, but the Dow Jones finally crushed the deals across the board, pulling all but two of the index’s constituent stocks into the green on Friday. Procter & Gamble Co. remained in the red, down almost -0.6% and below $170.00 a share after it was revealed that stock insider and company COO Shailesh Jejurikar had sold more than 10,000 shares, or almost a third of his stake in the company.
Read more Dow Jones news:
Intel falls 6% as investment in German factories becomes less certain
Goldman Sachs advances after Powell’s fiery Jackson Hole speech
Dow Jones Price Forecast
The Dow managed to reach 41,200.00 for the first time since slow July, amid a broad rally in stocks. As the index continues to test higher levels, the DJIA is on track to once again challenge the record high of 41,371.38 set in mid-July.
Despite the firm bullish bias, bidders risk losing momentum as price action is strained on the high side. The Dow Jones is still trading well above the 200-day exponential moving average (EMA) at 38,187.93, and a near-term pullback would see the Dow Jones fall back to the 50-day EMA, rising to the 40,000.00 key price bracket.
