The Dow Jones (DJIA) rallied to a new record high on Friday ahead of the Memorial Day weekend.
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President Trump officially sweared in Kevin Warsh as the 17th Fed Chair, replacing Jerome Powell. However, Powell will remain on the Fed as a Governor, with his term in that role set to expire on January 31, 2028.
“I want Kevin to be totally independent. I want him to be independent and just do a great job. Don’t look at me. Don’t look any anybody. Just do your own thing and do a great job,” Trump said at the swearing-in ceremony.
Meanwhile, equities received a boost from renewed optimism over a U.S.-Iran peace deal. Pakistan’s Chief of Defence Forces, Asim Munir, who has played a key role as a mediator between the two countries, is scheduled to travel to Tehran today, a Pakistani security source told Axios. Separately, Reuters reported that Qatar has also sent a negotiating team to the capital.
Elsewhere, the University of Michigan’s Index of Consumer Sentiment spiraled to an all-time low of 44.8 in May, down from 49.8 in April and badly missing the estimate of 48.2. Concerns of rising gas prices and inflation were the main factors responsible for the decline. Consumers now expect year-ahead inflation of 4.8% compared to 4.7% in April, while long-term inflation expectations rallied to 3.9% from 3.5%. “Critically, consumers appear worried that inflation will increase and proliferate beyond fuel prices, even in the long run,” said Survey of Consumers Director Joanne Hsu.
The Dow Jones is up by 0.89% 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.
Nvidia (NVDA) is pulling back after reporting its earnings on Wednesday, although software stocks Cisco (CSCO), IBM (IBM), and Salesforce (CRM) are lifting the tech sector higher. Meanwhile, Merck (MRK) is the top performer of the day after its partner, Kelun-Biotech, reported positive late-stage trial results for its cancer drug. The three other healthcare stocks in the index are trading higher as well.
Elsewhere, consumer cyclical stocks are facing pressure, while three of the four industrial stocks are in the green, led by Caterpillar (CAT).
Is the Dow Jones a Good Long-Term Investment?
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 $571.68, implying upside of 12.76% from current prices. The 30 holdings in DIA carry 30 buy ratings, zero hold ratings, and zero sell ratings.