- There's strong conviction that the Federal Reserve will cut interest rates in its forthcoming meeting in December.
- However, the US economy has been sending mixed signals with jobs data and inflation rate, and the next reading could hold sway on the Fed's decision.
The Dow Jones Industrial Average has maintained a steady uptrend since November 21, 2025, climbing from a close of 46,245 to 47,716 by November 28, marking a gain of over 1,470 points in that span. The Federal Reserve is set to make its decision in just over a week, but it could still carry surprises. So, what’s at play?
What’s Fueling the Recent Rally?
Since late November, the Dow’s ascent has been propelled by several key forces. After the U.S. government shutdown ended, people were more hopeful, and this caused the index to jump by 493 points on November 21. The New York Fed President, John Williams, also suggested there might be more interest rate cuts, which boosted the market.
Strong corporate earnings across industrials and healthcare sectors further supported gains, as evidenced by the Dow’s 3.2% weekly advance ending November 28, its best since June. Reduced tariff concerns and resilient consumer spending have also eased recession fears, per Investopedia analysis, allowing the index to reclaim levels above 47,000 despite Nasdaq’s monthly dip. It’s noteworthy how these elements have fostered a risk-on environment, positioning the Dow for potential extension into December.
Also, new data is very important. Recent reports show that the U.S. job market is slowing down a bit, and inflation is still going down. This has made investors think that the central bank is mostly done with its efforts to tighten the economy. The CME FedWatch Tool shows that many people believe there is a high chance of a rate cut soon.
Dow Jones Index End-Year Outlook
Despite the potential for volatility around the Fed decision, the Dow is well-positioned to end the year on a high note. The underlying narrative of decelerating inflation and a resilient economy provides a strong fundamental foundation. Barring a major geopolitical shock or an unexpected hawkish pivot from the Fed, the path of least resistance appears to be higher.
Dow Jones Index Chart
The Dow Jones Index chart shows it’s been consistently strong. It’s trading above its exponential moving averages (20-day at 46,974, 50-day at 46,643, 100-day at 45,856, and 200-day at 44,633).
The support levels are around 47,000 and lower at the 50-EMA at 46,643, where buyers have been active. On the upside, there’s resistance around 47,745 and 48,000 and if it breaks those levels, it could potentially go to new record highs.
Dow Jones Index daily chart as of Dec 1, 2025 with support and resistance levels. Created on TradingView
The Dow’s recent rise mainly comes from investors believing the Federal Reserve is done raising interest rates. There’s widespread belief that the Fed will even start lowering rates soon because inflation is slowing down, and the job market isn’t as strong.
A hawkish surprise, such as the Fed signaling rates will stay higher for longer than expected, would likely trigger a sharp market correction and steep selling pressure on the Dow.
Key influential reports include the US Non-Farm Payrolls, which reflect the job market’s health, and the Consumer Price Index (CPI), which is the primary measure of inflation.
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