The Dow Jones Industrial Average hits a record high for the second day in a row

• The Dow Jones posted another record bid on Tuesday.
• Investors are turning risk-on ahead of the Fed’s expected rate cut.
• Markets are divided amid the Fed’s first anticipated interest rate cut in more than four years.

The Dow Jones Industrial Average (DJIA) hit a new record high for a second straight day on Tuesday as investors jostle for position ahead of an anticipated interest rate cut by the Federal Reserve (Fed) during the midweek market session . Despite a strong start to the day, the Dow Jones gave up record highs and returned to the previous day’s trading range.

August US retail sales figures helped keep market expectations of the Fed anchored, rising 0.1% compared to the median forecast for a -0.2% contraction. The July retail sales figure was also revised up to 1.1%, although core retail sales (excluding auto purchases) rose just 0.1%, compared with the 0.2% forecast.

The only significant event remaining on the stock data book this week is Wednesday’s upcoming Fed rate call. Markets have been looking for a cut in the Fed funds rate since the start of the year, with investors clamoring for a cut in March. According to CME’s FedWatch tool, rate markets are still divided on the depth of the Fed’s expected first rate cut since early 2020, with 60% pricing in a 50 bps double to start the next rate cut cycle the Fed rate. The remaining 40% of rate cut expectations are stacked at a more reasonable 25 bps.

Dow Jones News

Despite an early burst to a new high on Tuesday, the Dow Jones remains broadly balanced for the day. The DJIA is mixed, with half of the major index’s listed securities testing in the red.

Walmart Inc. (WMT) pared recent gains, falling 2% on the day after hitting a new high of $80.96 on Monday. The retail giant’s share price is now easing, falling below $79 per share.

On the upside, Intel Corp ( INTC ) rose another 3.3% to settle at $21 a share after announcing plans to spin off the chipmaker’s foundry business into a subsidiary division, which would allow the computer hardware giant to raise additional external funding. The news follows this week’s announcement that Intel will receive an additional $3 billion in federal grant funding, despite plans to cut more than 10 percent of its workforce across the company. Despite a near-term recovery, Intel’s valuation remains down about 60% for the year.

Dow Jones Price Forecast

Tuesday is proving to be a really mixed day for the Dow Jones; despite setting a record bid above 41,750, the index is also testing to the low and poised to snap a four-day winning streak. Investors are holding steady as the calendar draws closer to the Fed’s next rate call, but nerves are still on edge, but a quick decline to the 50-day exponential moving average (EMA) at 40,493 cannot be ruled out.

The lack of significant technical resistance above the price action makes it difficult for bulls to price in a logical target, but intraday bidders will be wary of early pullback signs forming on the daily candlesticks.

Dow Jones Daily Chart