The Dow Jones Industrial Average (DJIA) remained relatively unchanged on Thursday as US Consumer Price Index (CPI) inflation cooled, sparking hopes for rate cuts in 2024. Despite the positive economic data, a shift out of tech stocks limited the market’s gains during the American trading session.
June’s CPI inflation figures came in below expectations, with annualized inflation dropping to 3.0% year-over-year and contracting by -0.1% month-over-month. Additionally, US Initial Jobless Claims for the week ended July 5 decreased to 222K, helping to push the four-week average down to 233.5K.
As a result of the cooling inflation, market expectations for a rate cut from the Federal Reserve (Fed) have increased, with bets of a September rate cut soaring to 95%. However, the pivot out of tech stocks has hindered the Dow Jones from making significant gains.
Tech giants like Intel Corp. and Microsoft Inc. saw declines on Thursday, while Home Depot Inc. experienced a 2.8% increase in its share price. The Dow Jones technical outlook shows the index testing a supply zone near the 40,000.00 major price handle, with momentum remaining stilted.
Overall, the Dow Jones is navigating through a challenging market environment, with hopes for rate cuts tempered by the pivot away from tech stocks. Investors will be closely watching for any developments that could impact the index’s performance in the coming days.
