Dow Jones Industrial Average gains on quiet Monday but lags telecomms rebound

• Dow Jones climbs on Monday ahead of Fed’s Wednesday rate call.
• Equities shrug off declining June rate cut bets.
• Update to Fed’s Dot Plot and US PMI figures also due this week.

The Dow Jones Industrial Average (DJIA) climbed on Monday as investors returned to risk bids to kick off a hectic central bank-themed trading week. US equities are rising across the board and the major indices are getting bolstered by a surge in telecomms.

The Federal Reserve’s (Fed) latest rate call is slated for Wednesday, and an update to the Fed’s Dot Plot of interest rate expectations will draw plenty of investors’ attention as markets continue to try to pin down when the US central bank will deliver a rate trim. Money markets have continued to pare back bets of a 25 basis point rate cut in June, but equities are shrugging off the attitude shift to lean into the bullish side on Monday. Rate futures are pricing in nearly 50-50 odds of no rate cut in June, down from nearly 70% chances of a 25 bps cut just a week ago.

Dow Jones news

As of writing, the Dow Jones Industrial Average is in the green around a third of a percent on Monday, gaining on the day but lagging its index counterparts. The S&P 500 has gained around eight tenths of a percent and the NASDAQ Composite is up over 1%.

The Communication Services Sector is firmly higher on the day, surging nearly 3% on Monday. Of the eleven major sectors in US equities, all of them are in the green to start the new trading week. 

Walt Disney Co. (DIS) is leading the charge on the DJIA, gaining 1.7% around midday on Monday to trade near $114.00. Salesforce Inc. (CRM), Apple Inc. (AAPL) and Caterpillar Inc. (CAT) are in a three-way slugfest to determine second place, with all three gaining around 1.5% on Monday. On the downside, Boeing Co. (BA) continues to shed weight, declining another 1.4% on Monday to trade into $180.00 per share.

Dow Jones technical outlook

Despite Monday’s gains, The Dow Jones Industrial Average is trading well within last Friday’s technical bounds, churning into the 38,880.00 level as near-term momentum finds an intraday price floor near 38,800.00.

Despite the day’s bullish tilt, the DJIA remains down from recent highs, and the index is still down nearly a full percent from last week’s peak bids near 39,230.00.

Dow Jones 5-minute chart