Dow Jones (INDEXDJX: DJI) Index currently sits at its fresh weekly high. The index has hit 34,914 points, up 0.5% for the day at press time. Previously, the Dow Jones Industrial Average found support at 34,245 points after suffering a 3.9% pullback., The benchmark index is currently 1.89% up from its last week’s low.
Despite an uptick, Dow seems to be lagging behind the Nasdaq100 and S&P500 indices which have had a relatively stronger bounce from their August lows. The Nasdaq100 is up by almost 4% from its last week’s low. Similarly, the S&P500 stands 2.8% above its last week’s low.
Dow Futures Rise As Investors Expect Pause In Rate Hikes
The US Labor Department announced a 3.8% increase in unemployment today, 0.3% more than the analyst’s expectation of 3.5%. However, the Non-farm payroll beat expectations by increasing 187,000 jobs in August. The payroll data also mentioned the decline in job vacancies and less-than-expected growth in the private sector. This suggests weakness in the labor market in the US.
Thus, analysts are betting at Fed to pause further interest rate hikes in the next FOMC meeting. According to CME Group’s FedWatch tool, 93% of traders bet that the Fed will not change the rates, while 63% expect the rate hike to pause in September. Due to this, the Dow Jones Index might see some more upside in the short term.
Dow Jones Index Forecast
The INDEXDJX: DJI perfectly hit the support level of 34250 points, which I had mentioned in my previous analysis. I expect bullish movement in the index due to the expectation of a pause in rate hikes.
Dow Jones Index forecast would flip bullish if the bulls reclaim the 35,600 resistance level. In this scenario, bulls may target 36,970 once again. However, if the sentiment in the market shifts to bearish, a correction back to the 34,260 support level will be on the cards.
I’ll keep posting my updated DJI analysis and my personal trade setups on Twitter, where you are welcome to follow me.
