Dow Jones falls 100 points after tapping fresh record high

The Dow Jones tapped the 45,000 level for the first time ever.
Despite an early upshot into a new record bid, the major index is trading softer.
US inflation and growth data met expectations, causing little stir.

The Dow Jones Industrial Average (DJIA) rose to another all-time high on Wednesday, tapping the 45,000 major price handle before settling back below the day’s opening bids near 44,750. Equities are turning tepid quickly as the US market space pivots into the upcoming Thanksgiving holiday on Thursday. Shorter hours on Friday further squeeze out the potential for momentum in the back half of the trading week.

Annualized US Gross Domestic Product (GDP) grew by the expected 2.8% through the third quarter, to no one's surprise and barely moving the needle on investor pulses. Core Personal Consumption Expenditure Price Index (PCEPI) accelerated to 2.8% for the year ended in October, also meeting expectations. While upticks in inflation metrics generally bode poorly for market expectations of future rate cuts, the move upward was widely expected, and a hold in monthly figures at 0.3% MoM helped to frame the bump in the data as being in the rear-view mirror.

Dow Jones news

After an early bump to test record highs, the Dow Jones is softening slightly, down around 100 points as of writing. Most of the major equity board’s listed securities are finding higher ground on the day, but concentrated losses in familiar tech stocks are dragging the averages lower.

Salesforce (CRM) fell over 3.5% to $330 per share as investors ease back on data management company that has been at the forefront of the AI integration space. CRM is slated to deliver its latest quarterly financials on December 3. Despite still being light on details about how a larger AI segment within the company will generate excess revenue, the generative data wave has propelled Salesforce to a $315 billion market cap, doubling its share price over the past five years.

Dow Jones price forecast

Despite pivoting into the red through the Wednesday trading session, the Dow Jones still set another record high, briefly piercing the 45,000 level for the first time ever. Despite all technical signals suggesting DJIA is overbought, bearish momentum has proven to be a trap rather than a successful entry point through most of 2024.

The Dow Jones is up around 20% YTD, and has outrun its own 200-day Exponential Moving Average (EMA), currently rising into 40,460, for over a year straight. A near-term floor is priced in at the 50-day EMA near 42,900, with the last swing low all the way down at the 42,000 handle.

Dow Jones daily chart

Economic Indicator

Core Personal Consumption Expenditures - Price Index (YoY)

The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve’s (Fed) preferred gauge of inflation. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures." Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

Why it matters to traders?

After publishing the GDP report, the US Bureau of Economic Analysis releases the Personal Consumption Expenditures (PCE) Price Index data alongside the monthly changes in Personal Spending and Personal Income. FOMC policymakers use the annual Core PCE Price Index, which excludes volatile food and energy prices, as their primary gauge of inflation. A stronger-than-expected reading could help the USD outperform its rivals as it would hint at a possible hawkish shift in the Fed’s forward guidance and vice versa.

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