Dow Jones Industrial Average roils on hectic Wednesday

• The Dow Jones rattled on Tuesday and continued to battle the 45,000 handle.
• ADP jobs report says the number of new worker positions grew less than expected.
• Despite firm gains in key stocks and sectors, the Dow Jones looked downward.

The Dow Jones Industrial Average (DJIA) churned in a tight range on Tuesday as investors grapple with mixed data and an overall headwind in non-tech stocks. ADP jobs figures hinted at a weaker-than-expected hiring phase in November, albeit by a slight margin.

Federal Reserve (Fed) Chairman Jerome Powell made an appearance on Tuesday, but the Fed head stuck closely to familiar talking points. Markets saw a brief spike in volatility, but the lack of momentous announcements regarding the odds of a rate cut in December saw investor interest wane.

US ADP Employment Change figures came in slightly below expectations for November, printing at 146K compared to the median market forecast of 150K. The figure eased further back from October’s initial print of 233K, which was revised sharply lower to 184K. With ‘preview’ Nonfarm Payrolls (NFP) figures showing potential slack in the labor market, investors are losing their sure-footedness about how Friday’s NFP print may turn out.

The US ISM Services Purchasing Managers Index (PMI) for November also slipped back to a three-month low, easing to 52.1 MoM compared to the forecast decline to 55.5 from October’s 56.0. While the Services ISM PMI component is still holding above the contractionary 50.0 level, the number still lost ground and pairs poorly with the Manufacturing PMI component released earlier this week that showed aggregated business opinions expect a slowdown in business conditions in the months ahead.

Dow Jones news

Despite battling into the high side throughout the day, the Dow Jones struggled on Wednesday, with roughly half of the board dipping into the red. Salesforce (CRM) rallied by a stunning 9% to cross $362 per share, climbing to all time highs on the back of continued promises of integrating AI into the company’s data management operations, despite missing the bottom line on earnings per share in its latest earnings call.

Dow Jones price forecast

Bullish momentum in the Dow Jones chart may have chilled in recent days, but bidders aren’t leaving much room for sellers to move. The major equity index is pinned close to record highs set north of the 45,000 handle. While buyers have yet to break into a fresh set of record highs this week, odds favor the high side as short momentum remains more of a bear trap than an opportunity.

Traders interested in an exhaustion play should anticipate a potential decline to the 50-day Exponential Moving Average (EMA), which is currently rising through 43,000. However, due to a long-standing pattern of bouncing off this key moving average, it's advisable for traders to avoid trying to time the exit and instead follow the crowd as the market moves into a new upward leg.

Dow Jones daily chart