DOW JONES INDUSTRIAL AVERAGE SQUEEZES HIGHER ON FRIDAY

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  • The Dow Jones is inching back into record highs on Friday.
  • The index continues to find play above 42,000 in the post-Fed glut.
  • The Dow Jones stock index rose up to 100 points, or 0.25%, during Friday trading.

The Dow Jones Industrial Average (DJIA) edged back into the top end during the Friday market session, keeping bids north of 42,000 and sticking close to this week’s all-time record peaks. Equities pivoted firmly into the bullish side after the Federal Reserve (Fed) cut interest rates for the first time in over four years, delivering an outsized 50 bps rate cut.

Federal Reserve (Fed) Chair Jerome Powell delivered a jumbo 50 bps rate cut this week, pivoting the narrative as a “re-calibration of policy” to shore up the US labor market rather than an outright snap reaction to decaying economic indicators. Markets, for their part, scooped up the Fed Chair’s bid full-parcel, bolstering equities across the board in a rate-cut splurge and sending the US Dollar Index (DXY) to a 14-month low.

With the Fed’s first rate cut in over four years finally out of the way, investors are now ready to pivot to the next immediate task: betting on whether the Fed’s November rate cut will be a 25 bps follow-up or another 50 bps slash. According to the CME’s FedWatch Tool, rate traders have fully priced in another rate cut from the Fed on November 7, with bets evenly split between 25 and 50 bps. Rate markets are so confident the Fed will deliver a follow-up rate cut in a little over six weeks there is currently a 0% chance priced in of the Fed holding rates steady in November.



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