Dow Jones Industrial Average struggles under the weight of Fedspeak, NFP expectations

• The Dow Jones fell 150 points on Wednesday after US jobs figures missed the mark.
• ADP hiring data slowed more than expected, and wage growth shrank to a two-year low.
• Investors await the Fed’s latest Meeting Minutes from December’s rate cut assessment.

The Dow Jones Industrial Average (DJIA) ground its way lower once again on Wednesday. The index backslid a choppy 150 points after equities turned tepid on the back of a misfire in preview jobs data ahead of this week’s key Nonfarm Payrolls (NFP) report. Stocks slowly recovered through the US market session, trimming back to the day’s opening bids near 42,550.

ADP Employment Change showed a slower pace of hiring than markets expected in December, easing to 122K versus the expected 140K and November’s 146K. ADP wage data also pumped the brakes and hit its slowest pace since mid-2021.

The Federal Reserve’s (Fed) latest Meeting Minutes revealed policymakers may be far more concerned about incoming President Donald Trump’s tariff plans than initially believed. Despite recent insistence from Fed speakers over the past few weeks where policymakers talked down the possible impact of immigration and trade policies on the Fed’s decision-making, the Fed’s latest policy meeting featured four separate discussion points regarding drastic changes to US policy that could have far-reaching impacts on central banking. Elsewhere in the meeting minutes, the Fed broadly agreed that it was time to slow the pace of rate cuts, confirming that policy uncertainty is one of the key drivers of the Fed’s internal expectations of far fewer rate cuts in 2025 than markets were previously expecting.

US markets will close early on Thursday, so traders should expect a tightening in market volumes during the American trading window. US operations are winding down in observance of the passing of former US President Jimmy Carter, who died in late December at the age of 100.

Dow Jones news

Equities listed on the Dow Jones were split roughly down the middle on Wednesday, but concentrated losses in key stocks are dragging the average to the low side. Johnson & Johnson (JNJ) tumbled to a new yearly low despite reaching ‘Fast Track’ status with the Food & Drug Administration for several of its new pharmaceutical offerings. JNJ is now down around 3% on the day and pushing below $142 per share.

Dow Jones price forecast

The Dow Jones’ bearish tilt, which began in late November, continues to weigh on the major equity index. The DJIA is on pace to close in the red for a sixth consecutive week and remains down nearly 6% from its all-time peak of 45,071 in November. Of the last 19 consecutive trading days, the Dow Jones has closed flat or in the red for all but three of them, including a record-setting run of 11 straight bearish sessions.

Despite a near-term bearish swing, downside momentum still faces significant headwinds. The DJIA is still trading north of the 200-day Exponential Moving Average (EMA) near 41,200, and bidders are still trying to get their feet under them and muscle price action back above the 50-day EMA near 43,150.

Dow Jones daily chart