Dow Jones Industrial Average climbs 300 points after US CPI inflation eases further

• Dow Jones continues march to fresh all-time highs, approaching 40,000.00.
• US CPI inflation ticked lower in April, sparking fresh Fed rate cut hopes.
• US Retail Sales eased, further bolstering hopes that downturn will push Fed to cut.

The Dow Jones Industrial Average (DJIA) clipped higher on Wednesday, gaining three-quarters of a percent during the US market session after US Consumer Price Index (CPI) inflation slipped further back. Broad-market hopes for Federal Reserve (Fed) rate cuts in the third quarter of 2024 reignited as inflation continues to cool and economic activity recedes.

US CPI inflation in April eased to 0.3% MoM compared to the forecast hold at 0.4%. Core US CPI also ticked lower, meeting forecasts of 3.6% YoY versus the previous period’s 3.8%. Inflation is still running much higher than the Fed’s 2% annual target, but steady progress is pushing up market bets that the Fed will make a first quarter-point cut in September.

US Retail Sales in April also receded faster than expected, printing flat at 0.0% for the month. Median market estimates expected US Retail Sales to tick down to 0.4% from the previous 0.6%, revised from 0.7%.

With inflation grinding slowly towards targets and wobbly domestic economic activity flashing warning signs of weakness, investors are scrambling for Fed rate cut bets. According to the CME’s FedWatch Tool, rate traders are now pricing in 71% odds of a first 25-basis-point rate cut in September.

Dow Jones news

The Dow Jones equity index is broadly higher on Wednesday, though gains are on the slim side compared to the other major US indexes. About two-thirds of the securities that comprise the DJIA are in the green as the rising tide of risk appetite lifts most boats.

Walt Disney Co. (DIS) is still down around -2.5% on Wednesday, falling to $102.74 per share after the company revealed softer-than-expected Q2 earnings reporting. On the high side, Salesforce Inc. (CRM) soared 3.35% to $286.06 per share as analysts expect the stock to outperform its already-lofty performance expectations of 12% YoY growth.

Dow Jones technical outlook

The Dow Jones is climbing on Wednesday, inching towards record highs and the 40,000.00 handle. The DJIA is pushing further into a bull run that kicked off after a mild pullback near 37,500.00. The Dow Jones is poised to close another day in the green, and has seen upside momentum in all but one of the last ten consecutive trading days.

Bulls are firmly in control with the Dow Jones trading well above the 200-day Exponential Moving Average (EMA) at 36,993.87. The DJIA is up nearly 6% for 2024, and 18% since crossing above the 200-day EMA back in November.

Dow Jones five minute chart

Dow Jones daily chart