The Dow Jones Industrial Average (DJIA) is a leading global stock market and business news resource. With more than 14 million stock shares traded daily, it is one of the largest and most frequently traded stock markets in the world. In a surprise announcement just before the close of New York Stock Exchange on Thursday, Federal Reserve officials indicated that they are planning to increase their interest rates over the next two years to help support the financial system.
It is not yet known what role, if any, the Federal Reserve will play in the economy. However, the potential for an economic slowdown was already evident in last week’s jobs report. While the unemployment rate fell to 7.4 percent, wage growth remained slow and retail sales were flat.
Even though the DJIA fell slightly for the day, it is still up by more than a hundred points since the beginning of the year, and nearly double the average change in the S&P 500 index during the same period. Given the current economic backdrop, a move by the Federal Reserve would have little or no impact on the Dow, as the majority of stocks in this market have already been affected by recent economic events.
A large number of factors have contributed to the strength of the DJIA, including a global economy that remains robust despite some recent strains. With the United States remains on track to return to full employment in the near future, a change in the Federal Reserve’s policy may have little or no effect on the Dow Jones.
Despite recent global developments, there is little evidence that investors are worried about the outlook for the U.S. economy. Although recent events around the globe, like a possible default in Venezuela and the collapse of a sovereign default in Greece, may have affected the performance of certain currencies, the overall performance of the Dow is still strong.
If anything, the stock market is likely to remain on a fairly steady path in the coming weeks, with the Dow Jones showing little or no change in its long-term direction. As the Federal Reserve continues to provide assurances that it will maintain its easy monetary policy, the Dow Jones and other major global stock indexes are likely to remain on a solid upward trend.
For now, investors will continue to look for signs that the Federal Reserve will keep its commitment to maintaining a relatively easy monetary policy through its decision on interest rates. Even if there are signs that the Federal Reserve does intend to raise its interest rates, the impact it will have on the Dow Jones may be small.
In addition, the fact that many of the reasons behind the weak performance of the stock market are not immediately apparent indicates that investors may be undervaluing certain stocks that they previously viewed as undervalued. Even though it may take some time to determine the true impact of a possible Federal Reserve rate hike, the recent run-up in the stock market has been impressive enough to make many traders look at the market’s underlying fundamentals. As the market becomes clearer, the market is expected to hold steady.
If there is one reason to believe that the stock market will hold steady, it is the recent announcement that the Federal Reserve will raise its key interest rate target range. While some experts have criticized this move as being too aggressive, it should provide a calming influence on the market.
The Dow Jones has been trading in a positive direction since late last month. In particular, the housing market has been on an upward trend, with new home sales continuing to rise. If current trends continue, a rebound in the housing market should result in a return of upward pressure on the Dow Jones.
There is no doubt that the Dow Jones will continue on a positive trajectory in the near future. although there is also a real chance that a recent run-up in the stock market may reverse course.