Dow Jones Industrial Average dips as AI investments drive broader market gains

The Dow Jones eased back below 47,500 on Monday, though losses remain limited.
Equity markets are overall higher to start the new trading week as Mag 7 investment roulette continues.
ISM PMI data showed a slight easing in business sentiment, but the index remains within normal levels.

Joshua Gibson FXStreet

The Dow Jones Industrial Average (DJIA) faced fresh declines on Monday, kicking off the new trading week with a 200-point decline. The Dow briefly tested below the 47,250 level for the first time in over a week, as 'Magnificent 7' concentrated investment gains lift other indexes.

Amazon (AMZN) saw a fresh rally on Monday, climbing around 5% after the internet ownership and baubles shipping giant announced a deal to invest $38 billion in ChatGPT maker OpenAI. Iren (IREN) data center supplier also inked its own $9.7 billion deal with Microsoft to provide additional hardware architecture to meet the ever-growing LLM tech growth demand. At the top of the pile, the lone chipmaker giant at the top of the AI tech mountain Nvidia (NVDA) climbed 3.7% as both of the AI investment deals announced on Monday will involve providing access to Nvidia hardware.

ISM PMIs show businesses still struggling with cautious buyers

The latest Institute for Supply Management (ISM) Purchasing Managers Index (PMI) report dipped to 48.7 in October, missing expectations and falling back slightly from September’s 49.1. Demand indicators within the ISM report broadly improved over the month, however all still remain in contraction territory, implying businesses are struggling to find new customers or convince current clients to expand operations. Overall, manufacturing activity among businesses that bothered to submit responses to surveys showed a net decline in economic activity in the manufacturing sector for an eighth straight month.

The Federal Reserve’s (Fed) speech patterns have taken a hard left turn as of late, veering into a more chaotic presentation than usual as policymakers’ opinions begin to deviate from a carefully crafted consensus. Investors have grown used to a certain level of organized pageantry from Federal Reserve talking points, but a brave new world has opened up before markets based on Fed Chair Jerome Powell’s surprisingly cautious stance at the Fed’s latest rate call. Fed officials also gave a rare three-way vote last week, with a few flyaway voters advocating for even steeper rate cuts or no cuts at all.

The shifting stance within the Fed has thrown market expectations for a December interest rate cut into jeopardy. According to the CME’s FedWatch tool, rate traders are still pricing in over 65% odds that the Fed will deliver a third straight interest rate cut on December 10; however, the majority of rate market bettors see even greater odds that the Fed will be pushed into waiting until January to deliver another 25 basis point rate cut.

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.

AUD/USD bounces back toward 0.6950 on fresh USD supply

AUD/USD bounces back toward 0.6950 in the Asian session on Friday. The US Dollar retreats from 17-month highs as traders take profits off the table ahead of the all-important US Nonfarm Payrolls report. Meanwhile, the Australian Dollar draws support from reviving expectations of a November interest rate hike amid elevated global yields and inflation risks.

USD/JPY struggles near 158.00 as USD retreats ahead of NFP

USD/JPY is struggling for fresh impetus near 158.00, moving away from the top end of its weekly range in the Asian session on Friday, after hotter-than-expected Tokyo CPI and amid a broad US Dollar retreat. Traders reposition themselves ahead of US Nonfarm Payrolls.

Gold fades the earlier optimism; back below $4,200

Gold could not sustain the post-NFP bull run past the $4,200 mark per troy ounce, receding toward the $4,180 region at the end of the week. The precious metal’s inconclusive price action comes amid fresh selling pressure hurting the US Dollar as investors assess the latest NFP data.

Week ahead: Fed minutes in the spotlight amid bond market rout

The first full week of October and the final quarter of the year get underway with little fanfare in terms of the economic agenda. But far from being short on excitement, the coming week will test market nerves, as government bond yields continue to soar on growing worries that the energy crisis will only get worse, fuelling inflation.

CFTC Report: Speculators turn more defensive as Oil exposure falls

The week in one sentence: During the week leading up to September 29, long positions in crude oil were significantly reduced, while short positions in the Canadian Dollar went up. In addition, the positioning of the Australian Dollar and the Japanese Yen declined, while Coffee buying stood out against a more general background of defensiveness.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.