The Dow Jones (DJIA) secured a new intraday all-time high of 45,770.20 on Friday, although the gains have since been reversed with the index falling into negative territory.
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The 53-month streak of monthly payroll gains has ended after the Bureau of Labor Statistics revised June’s nonfarm payrolls lower by 27,000 to a loss of 13,000 jobs. August recorded 22,000 job additions while economists were expecting 75,000, adding on to the list of concerning labor market signals. The unemployment rate now stands at 4.3%, up from 4.2% in July, the highest level since October 2021.
“The warning bell that rang in the labor market a month ago just got louder,” said Fitch Ratings head of economic research Olu Sonola. “A weaker-than-expected jobs report all but seals a 25-basis-point rate cut later this month.”
The Fed is widely expected to reduce the federal funds rate by 25 bps during the September 16-17 Federal Open Market Committee (FOMC) meeting. Following the nonfarm payrolls data, the odds of a 50 bps rate cut this month jumped to 11.8% after tallying in at 0% a day, a week, and a month ago, according to CME’s FedWatch tool. The odds of a 25 bps reduction remain the overwhelming favorite at 88.2%.
“Jerome ‘Too Late’ Powell should have lowered rates long ago. As usual, he’s ‘Too Late!’” Trump said in a Truth Social post on Friday.
The Dow Jones is down by 0.51% at the time of writing.
Which Stocks are Moving the Dow Jones?
Let’s pivot to TipRanks’ Dow Jones Heatmap, which illustrates the stocks that have contributed to the index’s price action.
Magnificent 7 members Nvidia (NVDA), Microsoft (MSFT), and Amazon (AMZN) are all deep in the red, dragging the index lower. NVDA is falling after Broadcom (AVGO) announced that it had secured a $10 billion order for its custom AI chips, potentially threatening Nvidia’s dominance. Financial stocks are also contributing to the downside, with all five members trading lower.
On the other hand, Salesforce (CRM) is mounting a recovery from its post-earnings drop. The company topped revenue and adjusted EPS expectations, although its third-quarter revenue guidance of $10.265 billion was below the analyst estimate of $10.29 billion. UnitedHealth Group (UNH) is also rising on the day, bringing its monthly return to 26%.
DIA Stock Moves Lower with the Dow Jones
The SPDR Dow Jones Industrial Average ETF (DIA) is an exchange-traded fund designed to track the movement of the Dow Jones. As a result, DIA is falling alongside the Dow Jones today.
Wall Street believes that DIA stock has room to rise. During the past three months, analysts have issued an average DIA price target of $496.04, implying upside of 9.07% from current prices. The 31 stocks in DIA carry 29 buy ratings, two hold ratings, and zero sell ratings.