Dow Jones continues churning as markets await trade talk results

The Dow Jones remains stuck near 43,000, but investor optimism remains buoyant.
US-China trade talks are close to wrapping up in London.
US CPI inflation data and consumer sentiment figures loom large later this week.

The Dow Jones Industrial Average (DJIA) is still trading into the high end of recent congestion on Tuesday. Market momentum remains limited overall as traders brace for a one-two punch of trade headlines and key post-tariff Consumer Price Index (CPI) inflation data due on Wednesday.

Delegates from the Trump administration are in the process of wrapping up trade talks with Chinese officials in London. Trade negotiations are close to being finished, with the final loose ends of this meeting expected to be tucked away after market close on Tuesday. Any major concessions from either side remain either unannounced or unachieved, and investors may be growing apprehensive about a lack of movement from either side as trade tensions continue to simmer away at the policy level.

Read more stock news: Nike stock advances over 3% as Lutnick claims trade talks going smoothly

The first batch of CPI inflation data, which will include initial price impacts from the Trump administration’s global “reciprocal” tariffs, is expected to hit markets on Wednesday. Median market forecasts are calling for an uptick in headline and core CPI figures. May’s annualized headline CPI inflation is expected to rise to 2.5% YoY from 2.3%, while core CPI inflation is forecast to tick up to 2.9% from 2.8%.

Producer Price Index (PPI) business-level inflation will be printing on Thursday, and is expected to hold steady at 3.1% YoY. The University of Michigan’s (UoM) latest Consumer Sentiment Index will land on Friday, and investors are again expecting an uptick in general consumer sentiment.

Dow Jones price forecast

The Dow Jones Industrial Average (DJIA) is steadily approaching the upper limit of its recent consolidation, getting closer to a near-term technical ceiling at the significant level of 43,000. Currently, price movements are strong, remaining above the 200-day Exponential Moving Average (EMA) around 41,650. Bullish momentum might experience a temporary pause as technical oscillators indicate overbought conditions.

Dow Jones daily chart

Economic Indicator

Consumer Price Index ex Food & Energy (YoY)

Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The CPI Ex Food & Energy excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally speaking, a high reading is bullish for the US Dollar (USD), while a low reading is seen as bearish.