Dow Jones Industrial Average struggles to shrug off Friday’s firm NFP beat

• Dow Jones grinds into the middle as investors shrug off declining rate cut bets.
• The US added 272K net new jobs in May.
• US wages also climbed faster than expected, crumpling September rate cut hopes.

The Dow Jones Industrial Average (DJIA) shrugged off a forecast-thumping Nonfarm Payrolls (NFP) print on Friday, climbing into a brief 0.2% gain through the US market session before slumping back to the day’s opening bids after a reactionary tumble to better-than-expected jobs additions in May.

US Nonfarm Payrolls delivered its third-best monthly net job gains on Friday, adding 272K new employment positions in May, well above the forecast 185K. The figure handily beat the previous month’s figure, which was revised slightly lower to 165K from 175K. 

US Average Hourly Earnings also climbed faster than expected, showing wages increased 0.4% MoM versus the forecast 0.3% and the previous 0.2%. Meanwhile, the US Unemployment Rate also ticked up to its highest level since February 2022, printing at 4.0% versus the expected hold at 3.9%.

With the US economy continuing to outperform investor expectations, broad-market hopes for Federal Reserve (Fed) rate cuts continue to get battered. According to the CME’s FedWatch Tool, rate traders are now pricing in barely 51% odds of a at least a quarter-point rate trim from the Fed on September 8, down significantly from the 70% odds that were priced in until just before Friday’s NFP print.

Dow Jones news

After some initial post-NFP jitters, the DJIA is recovering firmly on Friday. Two-thirds of the major index’s constituent securities are in the green on the day, with gains being led by 3M Co. (MMM), which is up around 3% in Friday’s trading. 3M’s stock was recently upgraded to a “buy” by Bank of America analysts, prompting investors to do just that. 3M crossed over $100 per share on Friday, and is up nearly 12% for the year.

On the low side, Unitedhealth Group Inc. (UNH) fell -1.8% on Friday, falling to $493.00 per share. UNH is down around -6.25% from mid-May’s peak near $525.00 per share, and Friday’s share prices are shedding further weight following the announcement of a shareholder lawsuit against the company for alleged losses stemming from securities fraud committed by the healthcare company between March 2022 and February 2024.

Dow Jones technical outlook

The Dow Jones tested the 39,000.00 handle in an intraday recovery on Friday, but fell back to the day’s opening range near 38,880.00. The index is holding steady after recent recovery bids from a near-term low at the 38,000.00 level, but Friday is shaping up to be another soft day to round out the trading week.

The Dow Jones continues to waffle after falling from record all-time highs above 40,000.00, and still remains down -3% from record peaks in May. A firm demand zone is priced in between 38,000.00 and 37,500.00, and the major equity index is still trading deep into bull country above the 200-day Exponential Moving Average (EMA) at 37,299.82.

Dow Jones five minute chart

Dow Jones daily chart