- The Dow Jones index slowly returns to record levels on Friday.
- The index continues to find utilize above 42,000 points on a surplus of inventories following the Federal Reserve meeting.
- The Dow Jones stock index rose to 100 points, or 0.25%, during Friday’s session.
The Dow Jones Industrial Average (DJIA) returned to the upper end of the day in Friday’s trading session, holding bids above 42,000 and holding close to this week’s all-time highs. Stocks turned strongly to the upside after the Federal Reserve (Fed) cut interest rates on Wednesday, easing interest rates for the first time in four years and delivering a larger-than-average 50 basis point rate cut. The Dow returned to the opening bids heading into the end of the week’s final trading session, but intraday price action is still playing with the 42,000 handle.
Fed Chair Jerome Powell delivered a massive 50 basis point rate cut on Wednesday, shifting the narrative to a “recalibration of policy” to shore up the U.S. job market rather than an immediate response to deteriorating economic indicators. Markets, in turn, lapped up the Fed chair’s offer in its entirety, lifting stocks across the board in a rate-cutting frenzy and sending the U.S. dollar index (DXY) to a 14-month low.
After the Fed’s first rate cut in more than four years, investors are now ready to move on to their next pressing task: betting on whether the Fed’s November rate cut will be a 25 basis point continuation or another 50 basis point cut. According to CME’s FedWatch Tool, interest rate traders have fully priced in another Fed rate cut on November 7, with bets spread evenly between 25 and 50 basis points. Interest rate markets are so certain that the Fed will deliver another rate cut in just over six weeks that there is now a 0% chance that the Fed will keep rates on hold in November.
Dow Jones News
A little less than half of the Dow Jones Industrial Average was underwater Friday, with Intel (INTC) leading the charge, down -3.5% to below $20.50 a share. Intel recently announced a slew of plans to turn the ship around, including laying off about 10% of its global workforce, spinning off its foundry business into an independent subsidiary and signing a up-to-date deal with Amazon to produce exclusive AI-powered chipsets for Amazon Web Services. Despite all the planned returns, investors are still wary of the silicon company’s expected $25 billion to $27 billion in capital spending over the next year.
Dow Inc (DOW), the holding company of Dow Chemical Company, is also trying to hit rock bottom on Friday despite the recent announcement that the manufacturing company received a $100 million grant from the Department of Energy to establish or expand a U.S. battery manufacturing facility.
Dow Jones Price Forecast
Despite the absolutely stellar performance on the charts recently, the bidding pressure is starting to show signs of wearing off. The Dow Jones is struggling to continue its record highs with little to no pullback. The main stock index is up almost 5.5% from its last swing low to the 40,000 core price level, with price action set to fall to the 42,000 level for now.
