- Dow Jones slips lower on Wednesday after FOMC Meeting Minutes.
- Hopes for a September rate cut are beginning to dry up.
- US PMI, Durable Goods Orders in the pipe for later in the week.
The Dow Jones Industrial Average (DJIA) slipped back during US market session on Wednesday as investors continue to get pushed back on broad rate cut expectations. A recent decline in US Consumer Price Index (CPI) inflation helped to bolster traders’ confidence in a September rate trim from the Federal Reserve (Fed). However, still-high inflation numbers well above the Fed’s 2% target range and a cautionary warning from Fitch Ratings that global services inflation is likely to remain higher for longer are battering investors’ rate cut dreams.
Fitch Ratings announced on Wednesday that global services inflation will likely remain higher for longer than originally anticipated, meaning interest rates are unlikely to recede nearly as quickly as investors have hoped through all of 2024. According to the CME’s FedWatch Tool, rate markets are pricing in only 60% odds of a quarter-point rate cut from the Federal Open Market Committee (FOMC) in September, tumbling from 70% in a matter of days. In December, rate traders were pricing in better-than-even odds of six rate cuts in 2024 from the FOMC beginning in March. Fast forward to today, and investors are seeing the door slowly close on two rate cuts for the year beginning in September.
The FOMC’s latest Meeting Minutes published on Wednesday, and while the FOMC didn’t completely rule out September rate cut, odds are looking slimmer as Fed policymakers reiterated the need to wait for stronger evidence that inflation would continue easing to the US central bank’s 2% target.
Dow Jones news
The Dow Jones traded mostly flat on Wednesday in the run-up to FOMC Meetings Minutes. Post-FOMC release, the Dow Jones has shed around three-quarters of one percent, backsliding nearly 300 points as investors balk at a Fed that is less willing to engage in rate cuts as investors continue to hope for.
Dow Inc. (DOW) has fallen -2.6% on Wednesday, trading below $57.40 and extending a backslide from a 52-week high set only a week ago. On the high side, Johnson & Johnson (JNJ) climbed 1.38% to $153.33 per share after reporting Q1 net profit of $3.26 billion. JNJ had posted a net loss of $68 million the previous quarter.
Dow Jones technical outlook
The Dow Jones has backslid from a recent all-time record high of 40,070.82, but intraday action has found a technical floor at 39,775.00. The equity index has been unable to recapture 39,900.00, but the DJIA remains firmly bullish in the medium-term.
The Dow Jones is trading well above the 200-day Exponential Moving Average (EMA) at 37,142.67 as investors take a breather from a broad-market bull run, but profit-taking remains thin keeping the DJIA bolstered firmly into bull country.
Dow Jones five minute chart
Dow Jones daily chart![](https://i0.wp.com/editorial.fxstreet.com/miscelaneous/DJIA-638520006616270374.png?w=788&ssl=1)
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
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Last release: Wed May 22, 2024 18:00
Frequency: Irregular
Actual: –
Consensus: –
Previous: –
Source: Federal Reserve
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