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Dow Jones climbs into record highs on Thursday

  • The Dow Jones rallied over 200 points to clip a new all-time high.
  • The AI bid is back in action with chip stocks back on the rise.
  • US Retail Sales rebounded in September, beating forecasts across the board.

The Dow Jones Industrial Average (DJIA) found a new all-time high on Thursday, bolstered by investors piling back into the AI stock rally and gaining over 200 points from the day’s opening bids. US Retail Sales handily beat the street, rebounding more than market analysts expected and further propelling equities into the high end.

US Retail Sales grew by 0.4% MoM in September, recovering from August’s 0.1% and beating median market forecasts of a 0.3% print. Retail Sales excluding Automotive spending also thumped forecasts, growing by 0.5% in September compared to the expected 0.1%, and easily vaulting over August’s 0.2% increase.

US Initial Jobless Claims for the week ended October 11 also beat market expectations, coming in at 241K for the week. Investors expected the week’s new jobless claimant count to hold steady at the previous week’s revised 260K.

Silicon manufacturers and chip-punchers are getting dragged higher across the board on Thursday. Nvidia (NVDA) was propelled into another all-time high on Thursday, climbing over 3%. The Taiwan Semiconductor Manufacturing Company, a key supplier in the tech sphere, announced stronger-than-expected Q3 earnings and raised 4Q revenue forecasts. The upbeat earnings call assuaged market fears that the AI boom might be fizzling out, even as large-scale predictive data-modeling projects continue to struggle with figuring out how to generate revenue from their projects.

Dow Jones news

Despite nearly half of the Dow Jones index trading cautiously in the red on Thursday, firm gains in key stocks are raising the overall equities board. Intel (INTC) rose 1.6% in a knock-on tech rally, rising above $22.50 per share as the struggling chipmaker battles back from a multi-year low.

Travelers Companies (TRV) surged 8% on Thursday, climbing above $262 per share after the insurer reported stronger-than-expected Q3 earnings. Revenues climbed QoQ when markets were broadly anticipating a slight decline. CEO Alan Schnitzer credited the company’s “stellar underwriting performance” to a net increase in earned premiums and an overall reduction in insurance payouts.

Dow Jones price forecast

The Dow Jones continues to grind out chart paper on the high end, clipping new all-time highs above 43,250 and extending 2024’s bull run to nearly 15%. Bullish momentum is once again outrunning long-term averages, with the 200-day Exponential Moving Average (EMA) rising through 39,500 and struggling to catch up.

Price action has firmly tilted into the overbought end, spelling trouble for traders looking for smooth sailing. While short-term traders will no doubt be looking for a downside snap back to median prices before reloading into another leg higher, there’s little reason for investors who are already heavily long to pull out now.

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.