Wed Sep 18 11:37:00 UTC 2024: ## Dow Jones Soars as Fed Expected to Cut Rates, But Recession Concerns Linger

**New York, NY** – The Dow Jones Industrial Average (DJIA) has surged by 6% since the beginning of September, reaching a new all-time high on Monday before the Federal Reserve’s (Fed) interest rate decision. The Fed is widely expected to cut interest rates today, with the market pricing in a significant 50 basis point cut. This move comes after the Fed held rates steady for 13 months at their highest level in almost two decades.

The Fed funds futures market is currently signaling a total rate cut of 250 basis points by September 2025, bringing the Fed funds rate down to 2.75%-3.00%. However, this rapid pace of cuts suggests a potential recessionary environment in the US. The US Treasury yield curve, which has been inverted for over two years, un-inverted on September 6th, indicating that the market is now pricing in a slowdown in economic growth.

While the Dow has enjoyed a strong rally, the performance of other market sectors paints a different picture. The tech-heavy S&P 500, along with the “Magnificent Seven” mega-cap stocks and the semiconductor industry, have underperformed since July, suggesting investors are shifting towards more defensive sectors like utilities, real estate, consumer staples, and healthcare. This shift is likely driven by the looming recessionary fears.

Despite the potential for a downturn, the Dow Jones appears to be holding strong. The recent rally has kept the major uptrend intact, and technical indicators continue to point towards a bullish momentum. However, a break below the key support level of 40,030 could trigger a medium-term corrective decline, bringing the Dow towards the 38,390 and 37,165 support levels.

As the Fed’s decision looms, investors will be closely watching for any hints on the economic outlook and the potential path for interest rates. The Dow’s performance, along with the shifting market dynamics, will offer clues about how investors are interpreting the Fed’s actions and the future of the US economy.

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