The Dow Jones (DJIA) is trading higher on Friday after September’s Personal Consumption Expenditures (PCE) index showed inflation in line with estimates, while core PCE rose less than expected on an annual basis. The report was originally scheduled for release on October 31 but was delayed due to the government shutdown.
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PCE rose by 0.3% from August and 2.8% year-over-year. Core PCE, which excludes volatile food and energy items and is the Fed’s preferred gauge of inflation, rose by 0.2% month-over-month and 2.8% year-over-year. Analysts were expecting a monthly rise of 0.2% and an annual increase of 2.9%.
Despite inflation remaining above the Fed’s target of 2.0%, the odds of a 25 bps cut at the December 9-10 Federal Open Market Committee (FOMC) meeting remain at an elevated 87.2% on CME’s FedWatch tool.
“We expect inflation will be stuck at close to 3% over coming quarters,” said Oxford Economics chief U.S. economist Michael Pearce. “However, once the one-off boost to goods prices from tariffs falls out of the comparison, underlying trends suggest inflation will moderate close to, but still above, 2% by the end of 2026.”
Meanwhile, U.S. consumer sentiment rose higher in early December, ending a five-month downturn. The University of Michigan’s preliminary December Index of Consumer Sentiment came in at 53.3, up from 51.0 in November and above the consensus estimate of 52.0. At the same time, sentiment is still down by 28.8% year-over-year. Furthermore, both year-ahead and long-run inflation expectations fell to an 11-month low. Consumers expect inflation to increase by 4.1% over the next year, down from 4.5%, and long-run inflation of 3.2%, down from 3.4%.
The Dow Jones is up by 0.09% 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.
Salesforce (CRM) is continuing to accelerate higher after reporting its earnings on Wednesday, bringing its five-day return to 14%. Other tech stocks in the index, like Nvidia (NVDA) and Microsoft (MSFT), are trading lower or near breakeven. That comes despite Microsoft announcing price increases for commercial customers of its Office and Microsoft 365 services next July.
Meanwhile, all four healthcare stocks are in negative territory, while Goldman Sachs (GS) and Visa (V) are leading the financial sector to the upside. Elsewhere, Chevron (CVX) is falling despite rising oil futures.
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 $535.72, implying upside of 11.63% from current prices. The 30 holdings in DIA carry 29 buy ratings, one hold rating, and zero sell ratings.
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