The Dow Jones (DJIA) is once again trading in positive territory, reversing an earlier drop into the red following a concerning jobs revision update.
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The Bureau of Labor Statistics provides a preliminary revision to nonfarm payrolls for the 12 months ended March every August or September. This time around, the bureau announced a record-breaking downward revision of 911,000 jobs, well above the consensus estimate for 700,000 fewer jobs. 911,000 jobs equates to 0.6% of the jobs market, marking the largest downward revision in percentage terms since 0.7% in 2009. Nonfarm payrolls revisions have ranged between -0.4% and +0.3% during the past 10 years, with an absolute average of 0.2%.
The revision comes after August’s nonfarm payrolls tallied at 22,000 compared to the estimate of 75,000, further intensifying labor market fears.
With an unsteady labor market, the Fed has more reason to cut rates in order to stimulate the economy. The odds of a rate cut at the September 16-17 Federal Open Market Committee (FOMC) meeting remain at 100% following the revision, according to CME’s FedWatch tool. There is a 91.8% chance of a 25 bps reduction and an 8.2% chance of a 50 bps cut.
While investors generally perceive a rate cut as a positive for the stocks, there’s a chance it could be a “sell the news” event, according to JPMorgan.
“We have concerns that the September 17 Fed meeting which delivers a 25bp cut could turn into a ’Sell the News’ event as investors pullback to consider macro data, Fed’s reaction function, potentially stretched positioning, a weaker corporate buyback bid, and waning participation from the Retail investor,” wrote JPMorgan Global Head of Market Intelligence Andrew Tyler in a note.
The Dow Jones is up by 0.25% 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.
UnitedHealth Group (UNH) is pushing the index higher with outsized gains after the healthcare company announced that it expects 78% of its Medicare Advantage members for the 2027 payment year to have plans with quality rankings of at least four stars, which “is consistent with our expectations and in line with historical performance.”
Meanwhile, investors have shrugged off the news that Nvidia (NVDA) will release its Rubin CPX GPU by the end of 2026. The GPU will be used for context inference and could potentially enable $5 billion of token revenue from a $100 million capital expenditure investment.
Elsewhere, all four industrial stocks are in the red while Magnificent 7 members Microsoft (MSFT) and Amazon (AMZN) are relatively muted.
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 $498.64, implying upside of 9.08% from current prices. The 31 stocks in DIA carry 29 buy ratings, two hold ratings, and zero sell ratings.