Dow Jones Industrial Average middles on Thursday after mixed data and earnings
- The Dow Jones Industrial Average treaded water near 44,800 on Thursday.
- Equities are tepid as markets digest recent developments and mixed earnings.
- US data split on Thursday, with better unemployment claims but lagging GDP growth.
The Dow Jones Industrial Average (DJIA) churned on Thursday, marking in tracks around 44,700 but sticking close to the day’s opening bids. Equity markets are still digesting this week’s earnings reports from heavy-hitters like Microsoft (MSFT) and Tesla (TSLA), both of which missed the bottom line on fourth-quarter performance.
Along with Microsoft and Tesla, Meta Platforms (META) was the third megacap tech company to report Q4 earnings during Wednesday’s overnight session. Meta traded into a new all-time high post-earnings, while Tesla managed to shrug off misses in both earnings growth and revenue. Microsoft’s share price backslid after missing market expectations, keeping the tech sector hobbled on Thursday.
United States (US) Gross Domestic Product (GDP) grew by just 2.3% QoQ on an annualized basis in Q4, missing the median forecast of 2.6% and falling even further from the previous quarter’s 3.1%. The sharp warning shot across the bow of headline growth flummoxed equities, sparking a deer-in-the-headlights freeze from traders expecting better.
US Initial Jobless Claims for the week ended January 24 beat expectations, helping to bolster investor sentiment somewhat, but the figure is well within recent norms. Week-over-week new unemployment benefits seekers clocked in at 207K, beating the market’s expected print of 220K. The previous week showed 223K net new unemployment claimants.
Dow Jones news
Most of the Dow Jones’ listed securities are trading into the green on Thursday, though concentrated losses in the tech sector are keeping the overall index hobbled in the midrange. Nvidia lost another 3.5%, falling below $120 per share as the tech glut continues, adding to previous losses after China’s DeepSeek threw a spanner in the market’s comfortable assumption that US-based AI tech companies had the industry on lockdown. Microsoft tumbled 6% after missing earnings expectations, falling into $415 per share.
Dow Jones price forecast
The Dow Jones Industrial Average is struggling to make headway in the back half of the trading week, with intraday bids getting stuck in the mire around 44,800. Despite near-term waffling, the overall index is still tilted firmly into the bullish side, free-floating close to record highs above 45,000. The Dow Jones is up over 7.5% from its last swing low below 42,000, and has closed in the green for all but three of the last 12 consecutive trading days.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
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