The Dow Jones Industrial Average (DJIA) eked out modest gains on Tuesday, advancing approximately 0.1% midway through the American trading session. However, broader market sentiment faces headwinds as Federal Reserve (Fed) officials sound cautionary notes about the central bank’s ability to lower rates in the absence of clear signs of inflation easing and labor market slackening.
Despite initial gains, the DJIA was tempered by remarks from Minneapolis Fed President Neel Kashkari, who expressed concerns about the stalled progress in bringing down inflation. Kashkari emphasized that the Fed will closely monitor inflation and labor market dynamics before considering rate cuts, indicating a likelihood of prolonged rate stability.
According to the CME’s FedWatch Tool, rate markets anticipate a quarter-point rate cut at the Fed’s September meeting, with a 67% probability. Additionally, there is over a 90% likelihood of a second rate cut before the end of 2024.
In Dow Jones news, most equities saw gains, with Caterpillar Inc. (CAD) rising around 1.7% and Visa Inc. (V) gaining 1.35%. However, Walt Disney Co. (DIS) plummeted over 10% following a disappointing report on subscription streaming growth, while Boeing Co. (BA) slipped 0.85% amid ongoing challenges.
Technically, the DJIA reached an intraday high near 38,980.00 before retreating to hover around 38,900.00. Despite this, the index remains in bullish territory on daily candles, supported by the 200-day Exponential Moving Average (EMA) near 36,842.67. The DJIA is poised to close positively for the fourth consecutive trading day, maintaining support above the recent swing low at 37,600.00.
