Dow Jones Industrial Average flattens ahead of Fed
- The Dow Jones is trading flat through Wednesday as markets await Powell.
- The Fed is widely expected to stand pat on interest rates for this meeting.
- Despite the forecast of no rate moves, markets will be watching the FOMC closely.
The Dow Jones Industrial Average (DJIA) is treading water on Wednesday, awaiting Federal Reserve (Fed) Chair Jerome Powell and the Federal Open Market Committee’s (FOMC) latest rate call, which is already widely expected to be no moves on rate cuts. A hefty earnings season is further constraining traders’ desire to make any heavy moves, with Apple (AAPL), Microsoft (MSFT), Facebook (FB), and Tesla (TSLA) slated to publish their latest earnings reports during the midweek.
The FOMC’s latest rate call is due at 1400 EST, or 1900 GMT, with Fed Chair Powell’s press conference slated to start half an hour later. The Fed’s steady rate call is a foregone conclusion, but the thing drawing market attention will be how Fed Chair Powell addresses the friction between United States (US) President Donald Trump and the Federal Reserve. President Trump has set the White House on a collision course with the US central bank, as Donald Trump’s history as a borrower has led him to believe that arbitrarily lower interest rates are the panacea to federal funding woes that his administration is facing.
President Trump stated his intention to “demand” lower interest rates from Powell and the Fed. However, the US president is typically ill-suited to make that particular demand when the rule of law and the Fed’s Congressionally appointed independence are factors. Investors tend to prefer the rule of law, and any particularly egregious moves by the split-term President to try to upend that will likely make waves among markets.
Dow Jones news
Most of the Dow Jones is holding in tepid territory ahead of the Fed’s latest rate call. The equity index is roughly split down the middle between losers and winners, though Nvidia (NVDA) is continuing its latest trend of falling to the bottom. Nvidia is down another 4.6% on Wednesday, falling below $123 per share as the chip-punching silicon merchant continues to take a pummeling as China’s open-source AI megamodel, DeepSeek, threatens US venture-capital-fueled AI infrastructure dominance.
Dow Jones price forecast
The Dow Jones Industrial Average is drying out just south of record highs above 45,000, with intraday price action testing the waters near 44,800. A topside break will see the Dow Jones chalking in fresh all-time peak bids, while a bearish turnaround will mark the major equity index’s first ‘lower high’ pattern since mid-2024.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits 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 exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the 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 buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.