Dow Jones Industrial Average slips amid high US yields, Fed rate cut odds increase

• Dow Jones dips from 42,500 as US Treasury yields rise.
• US job openings drop to lowest since January 2021, supporting rate cut bets.
• Consumer Confidence jumps to 108.7, the highest since March 2021.
• Boeing leads Dow gains, up 2.93% after share sale, while Chevron, Coca-Cola, and Home Depot lag behind, posting notable losses.

The Dow Jones Industrial Average (DJIA) trims off its Monday’s gains, retreats from daily highs at around 42,500, and edges down over 0.25% while US Treasury bond yields cling to gains. US jobs market data augmented the odds that the Federal Reserve (Fed) will cut interest rates at the November meeting, while Consumer Confidence improved sharply.

US bond yields continued to rise, as the 10-year Treasury note yield rose three and a half basis points to 4.32% after the US Department of Labor revealed that job openings in the US tumbled to their lowest level in three and a half years.

US job vacancies slumped to 7.44 million in September from 7.86 million a month before, the fewest job openings since January 2021. At the same time, the Conference Board (CB) showed that Americans grew the most optimistic about the economy, as the index increased from 99.2 to 108.7, its most strongly gain since March 2021.

Following the data, the CME FedWatch Tool shows odds for a 25-basis-point (bps) rate cut by the Fed jumping to 98%, up from 96% a day ago. This would leave rates in the 4.50%-4.75% range.

Dow Jones news

The earnings season continued, and among the leading companies that compose the Dow Jones Industrial Average, McDonald’s (MCD) reported earnings per share (EPS) of $3.23, above estimates of $3.20. Revenue was also above forecasts of $6.82 billion at $6.87 billion. Despite this, MCD clings to minuscule gains of 0.03% at $296.88 per share.

In the meantime, Boeing (BA) raised over $21 billion via its share sale on Monday, selling 112.5 million shares at $143.00 each as the company prepares to repair its balance sheet.

Following the shares sale, Boeing was the foremost leader in the session, gaining 2.93% at $155.10 per share, followed by Salesforce Inc (CRM), up 1.31% at $297.61 a share, and Cisco Systems Inc (CSCO) up 0.94% at $55.80. The laggard of the session was Chevron (CXP), losing 1.14% at $148.82; Coca-Cola Co. (KO), down by 1.27% at $65.82 a share; and Home Depot Inc (HD) edged 1.80% lower, down at $395.65.

Dow Jones price forecast

The Dow Jones consolidated just below the 42,350 area for the second straight day after forming an “inside day,” which could have opened the door for further upside. However, the DJIA slipped below Monday’s close, paving the way for further downside.

If sellers move in and push the DJIA below the October 25 swing low of 42,043, look for a test of the 42,000 mark. Up next lies the 50-day Simple Moving Average (SMA) at 41,879.

For a bullish continuation, the DJIA must clear the October 25 peak at 42,596. Once surpassed, the next resistance would be 43,000, followed by a record high at 43,322.

Momentum remains bullish as depicted by the Relative Strength Index (RSI), which pierced above its neutral line. This hints that buyers bought the dip and are eyeing higher levels.

Dow Jones daily chart