Dow Jones Industrial Average gains ground on easygoing Friday

The Dow Jones rose slightly on Friday to close out the week on the high side.
Equities wrestled with tariffs, earnings and geopolitical headlines this week.
Indexes recovered their footing after a choppy midweek pullback.

Joshua Gibson FXStreet

The Dow Jones Industrial Average (DJIA) found a bit of room on the high side on Friday, adding a little over 200 points to close out a back-and-forth week. United States (US) President Donald Trump’s long-awaited tariffs have come into effect, and markets are either bracing for fallout or hoping for another delay, in equal parts.

Despite recently tapping record highs near 45,130, the Dow Jones is struggling to maintain firm bullish momentum, with price action trapped near the 44,000 handle. The Dow is still finding a technical floor near the 50-day Exponential Moving Average (EMA), currently drifting above 43,700, but the next leg could land in either direction with the Relative Strength Index (RSI) stuck in the middle near 50.00.

Tariffs on... again?

With the Trump tariffs now in play, investors will be watching to see how the US’s newfound trade policy stance will play out. President Trump has threatened a tariff of 100% on all imported semiconductor microchips but added the caveat that chip tariffs will be waived for any company that “builds in the US”. For their part, tech companies have promised huge swaths of investment cash in the future for US-based manufacturing, spearheaded by Apple (AAPL), which has pinky-promised to invest up to $600B in US business development at some point in the next five years or so. Apple shares rose 4.5% on Friday, testing $230.00 per share.

There’s a chance that Trump’s tariffs could hit fast and early in the Gold market in particular. XAU/USD prices, which were already climbing ahead of Donald Trump’s tariff deadline, rose above $3,400 per ounce on Thursday after the Financial Times reported that some of the Trump tariffs could impose a levy on imported Gold bars, and could reach back and include pre-tariff sales that occurred between April and August.

Read more stock news: Trade Desk stock flails following CFO exit

Dow Jones daily chart

Economic Indicator

Consumer Price Index (YoY)

Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

AUD/USD flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY retreats from three-week top, slips below 158.50 amid intervention risks and softer USD

USD/JPY slides below 158.50 in the Asian session on Wednesday, snapping a two-day winning streak to hit a near three-week high the previous day, as intervention risks support the Japanese Yen. Meanwhile, the US Dollar remains on the back foot amid hopes for Iran diplomacy, further weighing on the currency pair as traders brace for some volatility surrounding US midterm election results.

Gold ticks lower while early trend points to Democrats victory in House

Gold trades with caution at around $3,930 in the Asian trading session on Wednesday. The precious metal struggles to gain direction as investors shift their focus to United States Midterm elections where early trend shows that Democrats would have a clear majority in House of Representatives.

Ethereum: US-led selling keeps ETH below $2,309 realized price

Ethereum (ETH) faces pressure near $2,300 on Tuesday as it struggles to recover its realized price. The top altcoin fell below its realized price, or investors' average on-chain cost basis, at $2,309 following the $6.3 billion Binance hack last Thursday.

US Midterms: Can Wall Street rally despite AI debt and credit risks?

Political uncertainty may be coming to an end, but the real question for investors is whether the technology sector can sustain its enormous spending commitments. The US midterm elections are arriving at an interesting moment for financial markets.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.