The Dow Jones Industrial Average experiences fluctuations

The Dow Jones Industrial Average (DJIA) is a key indicator of the overall health of the U.S. economy and stock market.

The Dow Jones Index maintained a slight hold on Monday, even as it experienced some volatility in pre-market trading. This week is pivotal for the U.S. economy, with the Federal Reserve (Fed) taking center stage. Fed Chair Jerome Powell is scheduled to testify before the U.S. Senate Banking Committee on Tuesday, while key inflation metrics—the Consumer Price Index (CPI) and Producer Price Index (PPI)—are set to be released on Wednesday and Thursday, respectively.

Tariff Threats and Executive Orders

On Monday afternoon, U.S. President Donald Trump is anticipated to sign a series of sweeping executive orders. Among these, there are expected to be new tariff threats, particularly targeting a flat import tax on all foreign-sourced steel and aluminum entering the U.S. Although these moves pose a potential risk to market stability, investor sentiment seems to downplay the trade war rhetoric. This comes in light of Trump's recent indecisiveness regarding previous trade threats, although existing tariffs on Chinese goods remain in effect.

Fed Chair Powell’s Testimony

This Tuesday marks Fed Chair Powell’s first appearance before the Senate since President Trump took office. Questions are likely to center on Trump’s tariff policies and their implications for the Fed’s decision-making framework. There is speculation regarding whether Powell will yield to any requests from the Trump administration, including potential adjustments to interest rates or the possibility of stepping down if asked.

Key Inflation Data on the Horizon

Critical U.S. inflation data is expected this week, beginning with the CPI report on Wednesday and followed by the PPI on Thursday. The New York Fed noted on Monday that consumer inflation expectations have stabilized around the 3% mark, which is notably higher than the Fed's target of 2%. Additionally, the NY Fed highlighted a decline in consumer expectations for increased spending, although consumers burdened by debt reported an easing in credit access.

Dow Jones Performance Overview

On Monday, the DJIA remained relatively steady, with about half of the stocks on the board showing gains. American Express (AXP) dropped roughly 3% to $307 per share after the company revised its earnings growth outlook for the first quarter downward. In contrast, McDonald’s (MCD) saw a nearly 4% increase to $306 per share, despite missing quarterly earnings estimates. Investors were encouraged by the company’s expansion plans, which are expected to boost earnings significantly by 2025.

Dow Jones Price Forecast

The DJIA continues to hover near 44,350 following a bearish push in the previous week. Current price action remains constrained below the 45,000 level, resulting in a congestion pattern that has squeezed momentum.

A near-term technical support level is forming around the 50-day Exponential Moving Average (EMA) at approximately 43,750. Both bullish and bearish sentiments appear to be losing momentum for now, yet the DJIA is still trading close to record highs just above 45,000.

As the market awaits crucial economic indicators and political developments, the DJIA's stability may be tested in the coming days. Investors will be closely monitoring Powell's testimony and the upcoming inflation data, as both could significantly influence market direction.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.