The Dow Jones (DJIA) is trading higher on Thursday as investors digest new inflation data and the promise of tax cuts from President Trump.
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Inflation, as measured by the Consumer Price Index (CPI), rose by 2.7% year-over-year in November, below the consensus estimate of 3.1%. Core CPI, which excludes volatile food and energy prices, increased by 2.6%, the lowest rate in nearly five years and below the estimate of 3%. However, data collection lapses arising from the government shutdown led to missing inflation components in November’s reports and the absence of an October update.
“It’s hard to take this data seriously,” said Navy Federal Credit Union Chief Economist Heather Long. “There was no data collection in October and limited collection in November.” Harvard economist Jason Furman added in an X post that November’s inflation may have been understated due to the Bureau of Labor Statistics (BLS) “effectively assuming” 0% shelter inflation.
Meanwhile, President Trump teased significant tax cuts for some American households next year during a Wednesday evening address from the White House.
“Under these cuts, many families will be saving between $11,000 and $20,000 a year, and next spring is projected to be the largest tax refund season of all time,” Trump said. He also announced a “warrior dividend” of $1,776 for 1.45 million U.S. military members that is slated to arrive before Christmas.
In other news, the Department of Labor (DOL) announced that initial jobless claims were 224,000 for the week ended December 13, below the estimate of 225,000. Continuing jobless claims for the week ended December 6 were 1.897 million, the lowest since May and under the estimate of 1.92 million.
The Dow Jones is up by 0.35% 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.
The tech sector is staging a comeback, with both Nvidia (NVDA) and Microsoft (MSFT) up by over 2%. Magnificent 7 peers Apple (AAPL) and Amazon (AMZN) are also trading higher.
A majority of Dow Jones stocks are within the +1% to -1% range, with UnitedHealth Group (UNH) and Chevron (CVX) facing declines outside of the range. Both Caterpillar (CAT) and Goldman Sachs (GS) are up by over 1%, with the former extending its year-to-date rise to 57% and the latter to 53%.
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 $540.77, implying upside of 12.15% from current prices. The 30 holdings in DIA carry 29 buy ratings, one hold rating, and zero sell ratings.
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