Dow Jones Industrial Average backslides 160 points on Wednesday


  • The Dow Jones shed half of a percent amid cautious market flows.
  • The midweek market session has investors looking ahead to US PCE inflation.
  • China GDP downgrade has investors concerned about physical trade.

The Dow Jones Industrial Average (DJIA) trimmed near-term gains on Wednesday, backsliding 160 points in the midweek market session. A downgrade to China’s Gross Domestic Product (GDP) forecast has investors concerned about a possible overhang in global trade, but most of the market is buckling down for the wait to Friday’s US Personal Consumption Expenditure Price Index (PCE) inflation print.

Equities pared back across the board after UBS trimmed its forecasts of Chinese GDP growth in 2024 and 2025. The Fitch ratings agency also issued a warning about performance in several of China’s business sectors in the second half of 2024 in a double-punch to market expectations of Chinese growth forecasts. 

According to UBS, Chinese GDP growth is expected to clock in at 4.6% for 2024 compared to the previous expectation of 4.9%, and its 2025 forecast has been shifted down to just 4.0% from 4.6%. From Fitch Ratings, China’s ongoing property development slump is expected to remain a drag on issuers across several sectors, crimping growth and activity prospects in a measurable way through the last half of the year.

This week, investors will be closely watching Friday’s US PCE Price Index inflation reading for July. It is anticipated that YoY PCE inflation will increase to 2.7% from the current 2.6%, while the MoM figure is expected to remain unchanged at 0.2%. Those who are anticipating a reduction in interest rates will be looking for the inflation data to be lower than anticipated. However, if the inflation data exceeds expectations, it could unsettle investor sentiment and throw a wrench in current rate cut forecasts.

Dow Jones news

Tepid risk appetite on Wednesday has most of the Dow Jones in the red for the midweek market session. Gains are being led by Merck & Co Inc. (MRK), which rose around 0.6% to $163.90 per share, while Nike  (NKE) fell 3.5% to $82.30 per share.

The moment is almost here. Despite a number of showstopping earnings calls this season, everyone has been waiting for Nvidia (NVDA) to release fiscal 2025 Q2 results, which finally arrive after the closing bell on Wednesday.

Dow Jones price forecast

The Dow Jones’ midweek pullback is picking up speed, with the equity index backsliding nine-tenths of one percent and shedding over 350 points. The DJIA has once again fallen below the 41,000 handle as near-term bullish momentum takes a pause and overextended price action snaps lower.

With bullish pressure running out of gas near fresh all-time highs beyond 41,250, bids are poised for an extended backslide to the 50-day Exponential Moving Average (EMA) rising through 40,000. Despite a near-term crimp in bidding momentum, short positions in the Dow Jones are unlikely to find a clear path all the way back to the index’s last major swing low below 38,500.

Dow Jones daily chart

Dow Jones FAQs

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review
XM
Read review
Moneta Markets
Read review
Trading Pro
Account
7.2
Tools
5.2
Service
6.6
Trading
8.0
Trust
5.0
Experience
7.0
Read review
Pepperstone
Account
8.2
Tools
8.2
Service
7.4
Trading
9.0
Trust
8.8
Experience
9.0
Read review
XM
Account
7.2
Tools
9.2
Service
9.4
Trading
9.0
Trust
7.0
Experience
8.4
Read review
Moneta Markets
Account
7.4
Tools
6.6
Service
8.0
Trading
6.6
Trust
5.2
Experience
9.2
Read review

Recommended content


Recommended content

Editors’ Picks

EUR/USD regains traction above 1.1000 ahead of US CPI release

EUR/USD regains traction above 1.1000 ahead of US CPI release

EUR/USD has found fresh buyers and jumps above 1.1000 in the European session on Thursday. The pair gains on the German coalition deal and Trump's 90-day pause on reciprocal tariffs, which have lifted risk senitment while exacerbating the US Dollar pain ahead of the US CPI data release. 

EUR/USD News
GBP/USD trades firm above 1.2850, US CPI data awaited

GBP/USD trades firm above 1.2850, US CPI data awaited

GBP/USD sustains the rebound above 1.2850 in European trading hours on Thursday. The British Pound capitalizes on risk appetite, courtesy of Trump's tariff pause, allowing the pair to recover ground. But further upside hinges on the US CPI data and US-Sino trade updates. 

GBP/USD News
Gold price eases from weekly top amid risk-on mood; still well bid above $3,100 ahead of US CPI

Gold price eases from weekly top amid risk-on mood; still well bid above $3,100 ahead of US CPI

Gold price trims a part of its strong intraday gains to a one-week high touched during the early European session on Thursday and currently trades just above the $3,100 mark. Concerns about escalating US-China trade tensions, along with fears about a tariffs-driven economic slowdown, turn out to be key factors that continue to underpin the safe-haven bullion.

Gold News
US CPI data set to reveal March inflation dip as markets weigh impact of Trump’s tariffs

US CPI data set to reveal March inflation dip as markets weigh impact of Trump’s tariffs

As measured by the CPI, inflation in the US is set to rise at an annual pace of 2.6% in March, down slightly from the 2.8% reported in February. Core CPI inflation, which excludes the volatile food and energy categories, is expected to ease to 3% in the same period from a year earlier

Read more
Trump’s tariff pause sparks rally – What comes next?

Trump’s tariff pause sparks rally – What comes next?

Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners. 

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025