Dow Jones Industrial Average climbs into record high after PCE inflation

The Dow Jones climbed into another fresh peak after PCE inflation print.
Headline PCE inflation eased closer to Fed targets in August.
Coming up next week: PMI activity measures, NFP labor print.

Joshua Gibson FXStreet

The Dow Jones Industrial Average (DJIA) rallied into another fresh record high on Friday, spurred higher by a cooler-than-expected print in the US Personal Consumption Expenditure Price Index (PCE) for August. Sentiment indicators also improved for September, and rate watchers will be pivoting to look ahead to next week’s Nonfarm Payrolls (NFP) report.

The PCE price index rose 0.1% in August, and chalked in PCE inflation growth of just 2.2% YoY, easing to the key inflation indicator’s lowest level since March of 2021. Headline inflation figures continue to ease toward the Federal Reserve’s (Fed) 2% target, but data watchers will note that the annualized core PCE print ticked higher for the year ended August, rising to 2.7% YoY from the previous 2.6%.

The University of Michigan’s (UoM) Consumer Sentiment Index rose again in September, printing at 70.1 compared to the expected 69.3 and even higher than the previous month’s print of 69.0. The UoM’s 5-year Consumer Inflation Expectations survey also held steady at 3.1% as elevated inflation expectations at the consumer level remain pervasive.

With this week’s data docket in the books, Fed watchers will be looking ahead to the next key data print, next Friday’s NFP labor report. Markets will broadly be looking for ongoing strength is the US labor market to further quell concerns about a potential recession looming over the US economy. US Purchasing Managers Index (PMI) business activity results are also expected early next week.

Dow Jones news

The Dow Jones leaned heavily into the bullish side on Friday, clipping a fresh record bid with most of the index’s individual stocks tilting into the green side. Only five of the Dow Jones’ constituent securities were stuck in the red for the day, with Amazon (AMZN) falling 1.5% to $188 per share. On the high end, Chevron (CVX) led the charge higher, rising 2.35% and climbing over the $145 per share level.

Dow Jones price forecast

The Dow Jones found a new record bid to wrap up the trading week, chalking in a new all-time high of 42,6365 before easing back below 42,500. Despite a regular stream of broken record highs, Dow Jones bulls are struggling to snag confident climbs, and bears are waiting just outside of the doors for an opportunity to drag price action back to the 50-day Exponential Moving Average (EMA) at 40,930.

Dow Jones daily chart

Economic Indicator

Personal Consumption Expenditures - Price Index (YoY)

The Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The YoY reading compares prices in the reference month to a year earlier. Price changes may cause consumers to switch from buying one good to another and the PCE Deflator can account for such substitutions. This makes it the preferred measure of inflation for the Federal Reserve. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD stays offered just above 1.1400

EUR/USD keeps the downtrend well in place for yet another day, challenging the 1.1400 contention zone on Tuesday. The continuation of the selling impulse in spot comes amid decent gains in the US Dollar, which continues to find support in the persistent effervescence surrounding the US-Iran crisis.

Middle East crisis intensifies, Gold up

Gold now seems to have embarked on a consolidative phase below the key $4,100 mark per troy ounce in the latter part of Tuesday’s session. Meanwhile, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP rebounds on rising on-chain activity

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.