- Dow Jones Somwhat eased on Friday, testing to 44,300.
- Despite a quiet end to the week, stocks are poised to close with a strong rally.
- US PMI data came in more mixed than expected, with little impact.
The Dow Jones Industrial Malce (DJIA) entered a soft pullback on Friday, falling about 200 points in a slow trading day. The Dow Jones is averaging an otherwise superior week, with the index taking about 2.3% of opening bids on Monday. The DJIA gained ground for the second week in a row, firmly indicating that the roller market is back after a six-week collapse.
President Donald Trump fanned the flames of pro-tariff sentiment this week by not establishing the tariffs he promised one day on the campaign trail. He also announced this week that he will “demand” lower interest rates from the Federal Reserve (FED) and intends to request a drop in oil prices from Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC).
The results of the S&P Global Purchasing Managers’ Index (PMI) survey for January were more mixed than analysts expected. According to a vague number of survey respondents, companies have seen a better-than-expected improvement in forward-looking expectations for growth in the manufacturing sector. However, service-based businesses are more desperate about future business conditions than expected.
The January manufacturing BMI rose to 50.1 from 49.4 the previous month, beating expectations of 49.6. Services PMI for the same period shrank to 52.8 from 56.8, well below the 56.5 expected, but still in positive territory overall, meaning purchasing managers who were upset by the survey response don’t expect much growth next month, but don’t expect an outright contraction. In working conditions as well.
Dow Jones News
Despite some steeper losses in overweight stocks welcoming the Dow slightly lower on Friday, the index itself is roughly in balance, with half of the stocks on the board still finding higher ground to end the trading week. The Walt Disney Co. (DIS) rose 1.8% to $113 per share, especially on expectations that past performance is indicative of future results after the entertainment monolith returned 24% over 2024 to people holding its shares. On the downside, NVIDIA (NVDA) fell 2.5%, falling below $144 per share, as investors feared the company may be doomed now that its 100% growth in annual revenue is over.
Dow Jones price forecast
Dow Jones Industrial Value is once again knocking on record highs just above the 45,000 set late last November. The DJIA initially fell 7.4% top to bottom in a six-week low after the new record was published, but the wheels are back on the road as buyers continue to lean into risk appetite.
The Dow Jones rose 6.8% from a swing low to 41,730 in January, testing the 44,500 area after closing in the green for all but one of the last nine straight trading sessions. The immediate barrier to new highs will be the 45,000 major handle itself, while a pullback to the 50-day Exponential Moving Average (EMA) near 43,275 could hamper the upside momentum.
Dow jones daily chart
Dow Jones Frequently Asked Questions
The Dow Jones Industrial Average, one of the world’s oldest stock market indices, is compiled from the 30 most actively traded stocks in the United States. The index is price-weighted rather than capitalization-weighted. It is calculated by summing the component stock prices and dividing by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years, it was criticized for not being broadly representative enough because it only tracks 30 groups, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The overall performance of the component companies disclosed in the company’s quarterly earnings reports is the key performance. US and global macroeconomic data also contribute as they influence investor sentiment. The level of interest rates, set by the Federal Reserve (FED), also affects the DJIA because it affects the cost of credit, on which many companies rely heavily. Therefore, inflation can be a key driver as well as other metrics that influence the Fed’s decisions.
DOW Theory is a method of determining the fundamental trend of the stock market developed by Charles Dow. The key step is to compare the trend of the Dow Jones Industrial Average (DJIA) and the Dow Jones Moving Average (DJTA) and only follow the trends where both are moving in the same direction. Size is confirmation criteria. The theory uses elements of peak and trough. Dow Theory postulates three trend phases: accumulation, when smart money starts buying or selling; Public participation, when the wider public joins in; And distribution, when the smart money comes out.
There are a number of ways to exchange GIA. One is the use of ETFs in ETFs that allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 component companies. A prime example is the SPDR Dow Jones Industrial ETF (DIA). DJIA Futures contracts enable traders to speculate on the future value of an index and options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to purchase a share of a diversified portfolio of DJIA stocks and thus provide exposure to the overall index.