Dow Jones Industrial Average grapples with downside post-PPI on Tuesday

• Dow Jones shied away from gains after PPI printed higher than expected.
• Fed Chair Powell made an appearance to soothe investor nerves after inflation print.
• US CPI inflation and Retail Sales in the barrel for Wednesday.

The Dow Jones Industrial Average (DJIA) stumbled on Tuesday, slipping back to 39,320.00 after US Producer Price Index (PPI) inflation came in higher than expected. Market sentiment recovered and dragged the DJIA back to even. However, a double-header of US Consumer Price Index (CPI) inflation and Retail Sales are still loaded in the barrel for Wednesday.

US PPI inflation rose to 0.5% MoM in April, over and above the forecast 0.3% and rebounding from the previous month’s -0.1% decline (revised down from 0.2%). Core annualized PPI came in at the expected 2.4% YoY, rising from the previous period’s 2.1% which was revised down from 2.4%.

Next up will be the US’ data headliner for the week with Wednesday’s Consumer Price Index (CPI) inflation print. US CPI inflation is expected to hold steady in April at 0.4% MoM, while YoY headline CPI inflation is expected to drop slightly to 3.4% from 3.5%.

US Retail Sales are also due on Wednesday, and investors are forecasting that MoM Retail Sales growth in April will ease to 0.4% from the previous month’s 0.7%.

Dow Jones news

About half of the securities that make up the Dow Jones Industrial Average are in the red on Tuesday. Visa Inc. (V) fell -1.5%, shedding -4.2 points and trading below $276.00 per share, closely followed by Walmart Inc. (WMT) which shed -1.25% and fell below $60.00 per share.

On the high side, Goldman Sachs Group Inc. (GS) gained around 1.6%, climbing seven points to trade above $460.00 per share. Boeing Co. (BA) and Intel Corp. (INTC) are battling for second place, up around 1.3% apiece on Tuesday and trading near $181.00 and $31.00 per share, respectively.

Dow Jones technical outlook

The Dow Jones Industrial Average (DJIA) is mired in intraday technical congestion near 39,400.00 on Tuesday as the major equity index grapples with twisting investor sentiment. The index dumped below 39,320.00 on reaction to inflation data, but the Dow Jones recovered back above the day’s opening bids before treading water.

Downside potential is weighing on the Dow Jones after snapping a winning streak that saw the index gain nearly 5% over seven consecutive trading days. The last bull run on daily candlesticks fell short of crossing all-time highs as the equity index nears the 40,000.00 major handle.

Dow Jones five minute chart

Dow Jones daily chart