Dow Jones Industrial Average churns on Tuesday after mixed bag US CPI inflation

• Dow Jones tests 39,060.00 before settling back into the opening range.
• US CPI inflation continues to ease overall, but MoM headline CPI ticked higher.
• Equity indexes are broadly on the rise, but DJIA remains capped.

The Down Jones Industrial Average (DJIA) is moderately up on Tuesday, with US equities finding gains after a somewhat mixed US Consumer Price Index (CPI) inflation print flashed an uptick in near-term inflation, but investor confidence remains hopeful as Core CPI inflation continues to ease.

Markets continue to pin hopes on a rate cut from the Federal Reserve (Fed) happening sooner rather than later. According to the CME’s FedWatch Tool, rate markets are continuing to price in a 70% chance of at least a 25 basis point rate trim from the Fed at its June policy meeting. Going further into the details, about 63% of rate futures traders expect a 25 bps cut, while 7% are hoping for a 50 bps rate cut in June.

Dow Jones news: 3M climbs nearly 5%, Boeing continues to shed weight

3M Co. (MMM) is the top performer listed on the Dow Jones Industrial Average, rising 4.8% by midday to trade into $98.60. 3M gained ground after the company announced that William Brown, the former CEO of L3Harris Technologies (LHX) will take over the helm at 3M beginning May 1.

Boeing Co. (BA) continues to decline as the company gets buried underneath negative headlines. The death of a former whistleblower who worked at the aerospace company adds further negative pressure to the already-pummeled stock and is piling onto a 10% decline in BO over the past month.

US CPI inflation continues to moderate, but near-term heat persists

MoM headline US CPI inflation ticked up to 0.4% in February, accelerating from the previous 0.3%, with YoY CPI inflation rising to 3.2% compared to the forecast hold at 3.1%. Core CPI numbers eased, but not as much as markets were hoping for, with MoM Core CPI holding at 0.4% instead of declining to the forecast 0.3%. YoY Core CPI ticked down to 3.8% from the previous 3.9%, but missed market forecasts of 3.7%.

Read More: US CPI inflation rises to 3.2% in February vs. 3.1% expected

An uptick in energy costs drove the uptick in near-term headline CPI, with over 60% of the increase in MoM CPI inflation coming from gasoline and shelter costs from owner’s equivalent rent.

According to Robert Frick, corporate economist at Navy Federal Credit Union, “Inflation continues to churn above 3%, and once again shelter costs were the main villain. With home prices expected to rise this year and rents falling only slowly, the long-awaited fall in shelter prices isn’t coming to the rescue any time soon.” Frick continued, “Reports like January’s and February’s aren’t going to prompt the Fed to lower rates quickly.”

Dow Jones Industrial Average technical outlook

The Dow Jones Industrial Average (DJIA) kicked off Tuesday’s trading near 38,820.00, whipsawing into a daily low near 38,600.00 on reaction to the mixed US CPI print before recovering and staging a thin rally into 39,060.00.

Profit-taking and headline fades dragged the equity index back into the day’s opening range and the major index is now grappling with chart territory around the 39,000.00 major price handle.

Dow Jones chart, 5-minute