The Dow Jones Industrial Average fell on Tuesday as investors took a breather

• The Dow Jones fell on Tuesday after hitting new highs this week.
• Mixed housing numbers gave markets little to chew on as traders await rate cuts.
• The US PCE print due at the end of the week marks a critical reading on inflation.

The Dow Jones Industrial Average (DJIA) was weaker on Tuesday, testing the bottom of the day’s opening bids after hitting a new high earlier in the trading week. Market action on the Dow Jones entered the mid-range, with market bets on a Federal Reserve (Fed) interest rate cut in September fully priced in. The long wait until the Fed’s next rate call will be full of fights over whether it will be 25 bps. or 50.

Fed Chairman Jerome Powell all but confirmed the central bank will pivot to a rate-cutting cycle on September 18 during an appearance at the Jackson Hole Economic Symposium last Friday, sending market appetite through the roof and sending stocks into – a new optimistic offer.

Mixed prints of June’s US home price data gave investors little to go on. The Federal Housing Finance Agency’s MoM home price index contracted -0.1%, compared to May’s print of 0.0%. Markets had expected a 0.2% print. Meanwhile, the S&P/Case-Shiller home price index rose 6.5% from a year ago, less than the revised 6.9% from the previous period, but still more than the 6.0% expected.

US Q2 Gross Domestic Product (GDP) numbers are scheduled to be printed on Thursday and are expected to hold steady at 2.8% on an annual basis. However, the key data print this week will be Friday’s reading of the US personal consumption expenditure (PCE) price index for July, which is expected to edge higher to 2.7% from 2.6% and maintain at 0.2% monthly. Market participants absolutely giddy with interest rate cut hopes will be looking for inflation data to come in below expectations, while an above-forecast print could send fresh jitters through investors’ risk appetite.

Dow Jones News

Despite an overall softer tone on Tuesday, the Dow Jones is roughly in balance heading into midweek. Half of the DJIA board is in green and the other half is easily removed. Nike ( NKE ) rose 1.1% to $85.20 a share, while Amazon ( AMZN ) returned 1.08% to $173.61 a share.

Dow Jones Price Forecast

The Dow Jones trades on Tuesday with an early exploration of the downside. The major stock index tested lower but remains well bid above 41,000.00 and is holding close to record highs set this week at 41,419.65.

The next immediate roadblock for bidders hoping to restore bullish momentum will be a firm break of the 41,500.00 round barrier. Despite a potential slowdown forming on the daily candlesticks, short sellers will need work to try to drag the price action up to the nearest significant technical barrier, the 50-day exponential moving average (EMA), which amounts to 40,000.00.

Dow Jones Daily Chart