Dow Jones (INDEXDJX: DJI) Index is up despite the rise in inflation, as reported on Wednesday. The chart of the benchmark index shows that it currently stands 1.3% above the 34,270 points resistance level. The Dow Jones Industrial Average rose to 34,718 points on Wednesday, up 0.19% till press time.
Despite a 0.3% increase in the monthly inflation rate, the NASDAQ 100 index and S&P 500 index also turned green today. The NASDAQ100 saw a 43-point increase and stood at 15,350 points on till press time. The S&P500 followed and was 0.27% up on the same day.
Wall Street saw an increased volatility on Wednesday as the core inflation increased 0.3% on MoM basis. Despite the unexpected increase in inflation, the interest rates are likely to remain the same in next week’s FOMC meeting. According to the CME FedWatch tool, 97% of the market expects no change in interest rates.
However, most analysts expect the Federal Reserve to adopt a hawkish approach near the end of the year to counter inflation. Edward Moya, an analyst at Oanda, expects the Fed to raise interest rates in November as “inflation is not easing enough”. The Dow Jones Index currently sits 2.7% below its yearly high.
The INDEXDJX: DJI chart below shows the index sitting at a new weekly high. A deeper analysis of the chart also reveals the index faced rejection at 35,629 points and then corrected 3.85%. Nevertheless, the index remains 9.3% above its yearly low of 31,714 points.
Dow Jones Index Forecast is expected to remain bullish, provided the bullish sentiment in the market sustains. I expect the index to target 35,050 points before next week’s FOMC meeting. However, if the bullish momentum fades, the bears can expect a retest of the 34,245 points level, which was the August 2023 low.
I’ll keep posting my updated DJI analysis and my personal trade setups on Twitter, where you are welcome to follow me.
This post was last modified on %s = human-readable time difference 17:02