Dow Jones Industrial Average tilts further into the green on Friday

The Dow Jones climbed into 46,250 on Friday, adding another bullish day on the backend.
Equities have risen after the Fed trimmed interest rates through the midweek.
Coming up next week: PMI survey results and another round of PCE inflation data.

Joshua Gibson FXStreet

The Dow Jones Industrial Average (DJIA) chalked in another slim but decisive gain on Friday, bringing the major equity index’s weekly performance to around a full percentage point gain. The Dow Jones has climbed into record highs on the back of the Federal Reserve’s (Fed) latest rate cut, and investors are positioning themselves for a series of consecutive follow-up cuts through the end of the year.

Dow climbs on Fed support

The Dow Jones has thus far put in a stellar performance, especially for late in the third quarter. While September is typically a soft season for equities, this September has bucked the trend. The Dow Jones is up over 1.6% for the month, marking in a string of high-water marks, and is on pace to close in the green for a fifth straight month.

Most sectors are on the high side for Friday, with tech stocks taking their usual place at the front of the pack, climbing 0.72% for the day. Consumer discretionary stocks took second place, rising around 0.5%, while energy stocks suffered a decline of around 1.45%.

Fresh batch of inflation data in the pipe

With the Fed’s long-awaited initial interest rate cut finally in the books, traders will have to pivot back to data watching next week. The latest round of S&P Global Purchasing Managers Index (PMI) survey results are due next Tuesday; US Gross Domestic Product (GDP) growth is scheduled for next Thursday; and an update to US Personal Consumption Expenditures Price Index (PCE) inflation is slated for next Friday.

Dow Jones daily chart

Economic Indicator

S&P Global Manufacturing PMI

The S&P Global Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The data is derived from surveys of senior executives at private-sector companies from the manufacturing sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity in the manufacturing sector is generally declining, which is seen as bearish for USD.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.