The Dow Jones Industrial Average begins its seventh consecutive day lower in summer markets

The Dow falls another 0.25% in serene Friday trading.
Stock indexes are generally lower as investors weigh their options.
Markets are already anticipating next week’s Fed interest rate announcement on December 18.

The Dow Jones Industrial Average (DJIA) lost ground during Friday’s serene session. The economic calendar during the US market session was strictly secondary, leaving investors to decide on the future pace of interest rate cuts by the Federal Reserve (Fed). The DJIA extended its compact but persistent short-term decline, falling further below the 44,000 level and recording a seventh straight day of declines.

U.S. export and import price index data released Friday broadly beat expectations, but low-impact data prints barely ticked the needle as investors look ahead to next week’s high-impact economic data release. A recent round of data from the US PMI (Purchasing Managers Index) survey will begin next week, and PMI data for the S&P Global Manufacturing and Services sector will be published on Monday. US retail sales data for November will be released on Tuesday and are expected to enhance to 0.5% from 0.4% m/m.

US inflation rates accelerated in November, according to key data releases this week. However, the enhance in costs has not been enough to dissuade investors from their current assumption of a quarter-point rate cut ahead of next week’s Fed call on Wednesday, December 18. According to CME’s FedWatch tool, interest rate traders have piled into confident bets that the Fed will cut interest rates for the last time in 2024, with a 97% chance of a 25 basis point rate cut next week.

Dow Jones News

Most of the Dow Jones index is trading flat, but losses in key stocks are dragging the board lower, with Nvidia (NVDA) shedding about 2.5% and falling to $134 a share as the broad tech market relaxes. Moreover, UnitedHealth Group ( UNH ) recovered 1.2% on Friday, again surpassing $522 per share after several days of headline-driven losses.

Dow Jones Price Forecast

Friday’s drop in the Dow Jones index by more than 100 points causes the main stock council to lose almost 3% from the recent record highs above 45,000. Despite seven straight days of trading in the red, the Dow Jones remains in the bull zone, and the price action is located north of the 50-day exponential moving average (EMA) near 43,490.

Short-term bearish pressure on index prices may soon go beyond the runway. Over the past 12 months, the Dow has performed exceptionally well, outperforming its own moving averages. Bidders will likely want to re-enter the fray once bids make contact with the 50-day EMA. However, a move below the recent low around 43,000 could trigger a recent round of bearish momentum.

Dow Jones daily chart

Economic indicator

Fed’s interest rate decision

The Federal Reserve (The Fed) deliberates on monetary policy and decides on interest rates at eight previously scheduled meetings per year. It has two tasks: to keep inflation at 2% and to maintain full employment. Its main tool for achieving this goal is setting interest rates – both those at which it lends to banks and those at which banks lend to each other. If it decides to enhance interest rates, the US dollar (USD) will strengthen as it attracts a greater inflow of foreign capital. If it cuts interest rates, it will typically weaken the dollar as capital flows to countries offering higher yields. If rates remain unchanged, attention will focus on the tone of the Federal Open Market Committee (FOMC) announcement and whether it will be hawkish (expecting higher interest rates in the future) or dovish (expecting lower interest rates in the future). .