The Dow Jones (DJIA) secured a new intraday record high of 46,128.45 on Thursday, shrugging off two pieces of concerning economic data.
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August’s Consumer Price Index (CPI) grew at a monthly pace of 0.4%, the highest rate since January and above the consensus estimate of 0.3%. It rose by 2.9% on an annual basis, also above the expectation of 2.7%. Core CPI, which excludes volatile food and energy items, grew by 0.3% month-over-month and 3.1% year-over-year. The two figures remained unchanged from July and were in line with their estimates. However, both CPI and core CPI remain well above 2.0%, which is the Fed’s long-term inflation target.
Furthermore, initial jobless claims for the week ended September 6 grew by 27,000 to 263,000, ahead of the estimate of 235,000 and reaching their highest level since October 2021. Continuing jobless claims, which lag initial jobless claims by one week, fell to 1.939 million from 1.940 million and were below the estimate of 1.950 million.
“While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation when they announce a rate cut next week,” wrote Principal Asset Management’s Sheema Shah. “If anything, the jump in jobless claims will inject a bit more urgency in the Fed’s decision making, with Powell likely signaling a sequence of rate cuts is on the way.”
The Fed must make a double-edged choice at the September 16-17 Federal Open Market Committee (FOMC) meeting. Higher inflation pushes the central bank toward maintaining or raising rates, while a softening labor market leans in favor of lower rates.
The Dow Jones is up by 1.40% 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.
Every single stock in the financial, healthcare, industrial, and basic materials sectors is rising, contributing to the Dow Jones reaching a record high. Financial stocks are particularly strong, with Goldman Sachs (GS) leading the charge ahead of a widely expected 25 bps rate cut this month.
However, the Magnificent 7 components of the index are taking a breather, with both Nvidia (NVDA) and Microsoft (MSFT) trading slightly lower. Salesforce (CRM) is leading the technology sector to the upside following an insider buy.
DIA Stock Moves Higher 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 rising 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 $504.57, implying upside of 9.24% from current prices. The 31 stocks in DIA carry 29 buy ratings, two hold ratings, and zero sell ratings.
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