Dow Jones Industrial Average finds thin gains despite declining consumer sentiment

• Dow Jones climbs 0.25% as investors grapple with pullback in consumer confidence.
• UoM Consumer Sentiment, Inflation Expectations come in worse than expected.
• Fedspeak dominates the headlines as policymakers talk down rate cut hopes.

The Dow Jones Industrial Average (DJIA) gained around a hundred points on Friday as equities try to shake off a decline in the University of Michigan’s Consumer Sentiment Index which showed US consumers are increasingly concerned about long-run inflation taking hold. Consumer 5-year Inflation Expectations ticked higher as the US economy begins to buckle under the weight of price growth runner even hotter and longer than previously expected.

The UoM’s Consumer Sentiment Index for May declined sharply to 67.4 in May, falling well below the market forecast 76.0 and hitting its lowest figure in six months as consumer confidence deteriorates. 5-year Consumer Inflation Expectations also ticked higher to 3.1% in May compared to the previous 3.0%.

Multiple Federal Reserve (Fed) officials hit the newswires on Friday as central planners try to talk down broad-market expectations for rate cuts in 2024 in the face of recent stubborn inflation figures. 

Read more: 
Fed’s Bowman: I don't see rate cuts as warranted this year
Fed's Goolsbee: Housing remains a significant inflation challenge
Fed's Logan: Too early to think about cutting rates

Dow Jones news

The Dow Jones Industrial Average is the top performing US equity index on Friday, gaining around a fifth of a percent heading into the last stretch of the trading week. Around half of the equities that makes up the DJIA are in the red, limiting upside momentum.

Nike Inc. (NKE) shed 2.25% during Friday trading, declining two points and falling below $92.00 per share. On the upside, 3M Co. (MMM) and McDonald’s Corp. (MCD) are competing for top spot, gaining 1.88% and 1.8%, respectively.

Dow Jones technical outlook

Despite hobbled risk appetite, the Dow Jones managed to set a new peak for the week, trading into 39,579.23 before settling back below 39,500.00. Top side momentum is set to stall with the Dow Jones appearing overextended. The major equity index is trading well above the 200-day Exponential Moving Average (EMA) at 36,893.00.

The Dow Jones is on pace to end a seventh consecutive day in the green, and the index is up around 2% for the week.

Dow Jones five-minute chart

Dow Jones daily chart