Dow Jones Industrial Average eases after US PMI miss

• The Dow Jones lost 200 points Thursday as investors blinked.
• US PMI numbers were mixed, with services rising but manufacturing falling.
• Investors are waiting for further signs of Fed interest rate cuts.

The Dow Jones Industrial Average (DJIA) lost weight on Thursday, falling about 200 points after a miss in the US Purchasing Managers’ Index (PMI) numbers gave investors reason to pause. US PMI prints further highlighted a softening of the US labor market, sending jitters through markets, which continue to bet that a Federal Reserve (Fed) interest rate cut in September will solve all their problems.

US manufacturing PMI figures fell back to 48.0 in August, well below the constant estimate of 49.6. The US services PMI unexpectedly rose to 55.2 from 55.0, compared to the forecast decline to 48.0. Despite the rise in services PMI numbers, core employment numbers continue to show a slowdown in the US labor market, adding to concerns that were largely ignored when the US Bureau of Labor Statistics deleted retroactively more than 800,000 jobs from NFP (Nonfarm Payrolls) since March. week.

Markets continue to long for a September cut, but Thursday’s PMI data triggered a pullback from a recent surge in bets that the Fed would cut by 50 bps on September 18. Rate markets retreated on a generally healthier expectation of a single quarter point cut. in September, pricing in about a 75% chance of a 25 bps rate cut.

The Jackson Hole Economic Symposium is being held in Wyoming today, and investors will be looking ahead to an expected appearance on Friday by Fed Chairman Jerome Powell. Markets hope the Fed chief will introduce firmer guidance on how likely the Fed is to cut in September, as well as by how much.

Dow Jones News

The Dow Jones is down slightly on Thursday, with about two-thirds of the index down on the day. Losses are led by Intel Corp. (INTC), which fell another 3.3% to $20.70 per share. Gains remain significantly capped on Thursday, with American Express Co claiming the top of the board. (AXP), which managed to rise 0.85% to $248.40 per share.

Dow Jones Price Forecast

With the Dow Jones retreating, there is an upside risk of a bearish correction triggering, with top momentum exhausted just below the all-time highs set in July. The recent rally in the Dow Jones is poised to take a break and give short pressure a chance to pull price action back to the 50-day exponential moving average (EMA) at 39,481.00.

Dow Jones Daily Chart