Dow Jones: Wall Street Plateaus Despite PCE Inflation

Growth fears begin to weigh on Wall Street

Wall Street ended nearly flat on Thursday after a sharp rally sparked by remarks seen as dovish by Jerome Powell. Traders failed to take advantage of PCE inflation slowing to a 10-month low. They preferred to focus on the drop in the ISM manufacturing index to 49%, in contraction territory for the first time since the start of the pandemic in May 2020, and the increase in layoff announcements, according to the “Challenger” jobs report.

The ISM and the Challenger report punished the sentiment, but are hardly the only ones that paint a gloomy outlook for the economy. Chicago’s PMI fell to 37, a level that has consistently coincided with a recession in the US economy. Separately, IMF Managing Director Kristalina Georgieva said global growth forecasts for 2023 have darkened further, with a growing risk of growth falling below 2%, which would be the first since 2009 (excluding covid).

The fear of growth is therefore gradually gaining the upper hand in relation to the fear of inflation. The release of the US employment report this afternoon could therefore once again be the most influential economic data on the markets in the coming months.

Consensus expects just 200,000 job creations, which would be the lowest amount since January 2021, and unemployment steady at 3.7%.

Daily Dow Jones Price Chart (CFD Wall Street) – Key Levels


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