Dow Jones claws back 300 points ahead of US election results

• The Dow Jones pushed back into the high end of near-term consolidation on Tuesday.
• Equity markets are bracing for the results of the US election showdown that kicks off this week.
• Indexes have been rangebound heading into the election window.

The Dow Jones Industrial Average (DJIA) gained ground on Tuesday, climbing around 300 points to add three-quarters of one percent to its top-line. The major equity index is bumping into the ceiling of a near-term consolidation range as investors brace for the outcome of the US election as US voters head to the polls.

Another Federal Reserve (Fed) rate call looms ahead this week. Fed Chair Jerome Powell is widely expected to deliver another quarter-point cut to interest rates on Thursday, bringing the Fed Funds Rate down 25 bps to 4.75%. The Fed Funds Rate peaked at 5.5% in July of 2023, and investors have been clamoring for a return to a low interest rate environment that has become familiar territory since US interest rates clattered to an all-time low near 0% in early 2009.

US election odds have both candidates neck-and-neck in a dead-heat race for the Presidency, with former President Donald Trump and current Vice President Kamala Harris polling within 5% of each other, depending on which poll results you reference. Equity investors, tech sector addicts specifically, appear to broadly believe former President Trump to be the preferred stock-friendly candidate, an odd choice considering the Republican candidate has strongly voiced support of a return to the Smoot-Hawley tariff era of US history. Trump has regularly suggested stiff tariffs across the board on all imported goods into the US, an incredibly inflationary economic policy proposal.

The University of Michigan’s (UoM) Consumer Sentiment Index is waiting in the wings and slated for release on Friday. Investors expect November’s UoM sentiment indicator to climb to a six-month high of 71.0 from the previous month’s 70.5.

Dow Jones news

Most of the Dow Jones equity board is firmly in the green on Tuesday, with less than ten of the index’s listed securities down by half of a percent or more. Losses are being led by Boeing (BA), which backslid nine-tenths of a percent and falling below $154 per share. Boeing briefly rallied early Tuesday after announcing that the aerospace company finally negotiated an end to their workers’ strike, but markets remain concerned about the airplane manufacturers profitability looking forward and sent the ticker back into the low end.

Intel (INTC) rose over 4% on Tuesday, climbing into $23.50 per share despite an announcement that the Dow Jones Industrial Average would be dropping the chipmaker in favor of long-running AI rally darling Nvidia. Nvidia will be included in the Dow Jones equity roll beginning on Friday, November 8.

Dow Jones price forecast

The Dow Jones has seen some near-term chop as the major index grinds out chart paper around the 42,000 major handle. Price action has been pinned to the 50-day Exponential Moving Average (EMA) since dipping into its current range at the end of October. 

Despite recent consolidation, the Dow Jones remains pinned deep into bull country. The index has outpaced its 200-day EMA for over a year straight and has closed higher for all but two of the last 11 straight calendar months. 
 

Dow Jones daily chart