The Dow Jones (DJIA) rose as much as 0.4% on Wednesday but has since reversed course and slipped into negative territory.
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President Trump’s tariff policies are starting to have a noticeable effect on U.S. trade. This morning, the Bureau of Economic Analysis (BEA) announced that the U.S. trade deficit fell by $18.6 billion, or 23.8%, month-over-month to $59.6 billion in August. The data was delayed by over seven weeks because of the government shutdown.
Imports notched a 5.1% drop to $340.4 billion, marking the largest monthly drop in four months. Exports rose by 0.1% to $280.8 billion. Notably, the U.S. had a $15.4 billion trade surplus with China, while its deficit with Switzerland fell by $7.6 billion.
“August’s smaller trade deficit will be a tailwind for third quarter real GDP, since it means that more U.S. expenditures were directed toward domestically-produced goods and services rather than foreign ones,” said Comerica Bank Chief Economist Bill Adams.
Ahead of Nvidia’s (NVDA) earnings after the market close today, fears of a bubble in AI have become increasingly prevalent. NVDA has a 2.46% weight in the Dow Jones, although its presence in the
S&P 500 (SPX) and the Nasdaq 100 (NDX) is much more significant at 7.57% and 13.88%, respectively.
Wolfe Research isn’t panicking just yet, labeling the bubble concerns as “overblown” for the time being.
“We remain buyers of AI-related stocks on share price weakness, but [we’re] waiting for either an upside NVDA surprise or more washed-out technical to become more aggressive buyers,” said the firm.
The Dow Jones is down by 0.32% 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 trading higher ahead of its earnings, with options pricing suggesting a 7%, or $320 billion market capitalization, move in either direction.
Elsewhere, Walmart (WMT) is in the red after CNBC reported that the retailer is in talks to buy Israeli tech startup R&A Data. Walmart is also set to report its fiscal third quarter earnings on Thursday after the closing bell. Boeing (BA) is also trading lower, despite a slew of new jet orders from customers like Gulf Air, Emirates, and Ethiopian Airlines during the past few days.
Finally, Merck (MRK) is trading slightly lower after announcing positive phase 3 trial results for its HIV-1 drug. Shares of the company are still up by about 11% during the past month.
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 $539.38, implying upside of 17.11% from current prices. The 31 holdings in DIA carry 29 buy ratings, two hold ratings, and zero sell ratings.
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