Dow Rebounds: 300-Point Climb After Confidence Dip

The Dow Jones Industrial Average (DJIA) rebounded on Monday, rising over 300 points from its low point, attempting to recover from last week’s losses triggered by disappointing consumer confidence data. While the market opened the week with a positive bias, gains were modest due to lingering concerns.

Following concerning consumer sentiment figures from February, investors are now focused on upcoming earnings reports from home improvement retailers Home Depot (HD) and Lowe’s (LOW) for insights into consumer spending. The Personal Consumption Expenditure (PCE) inflation data, also due this week, will be closely watched for indications that January’s higher-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) figures were temporary and not a sign of renewed inflationary pressures.  

Despite mixed investor sentiment, the majority of Dow Jones components saw gains on Monday, with over two-thirds of listed securities rising. However, Microsoft (MSFT) fell by 1%, to $404 per share, after announcing cuts to its data center spending, reigniting fears about the sustainability of the AI boom.

Looking ahead, while the Dow Jones is recovering from last week’s sharp decline, it remains in a bearish trend. The index is trading below its 50-day Exponential Moving Average (EMA) near 43,930, and buyers are struggling to gain momentum from their recent low.

The Dow Jones dropped approximately 2.75% over two days, falling from 44,575 to 43,345. However, further losses appear limited as the market recovers from four-week lows. The index is currently finding support above its long-term 200-day EMA, which is approaching 42,000.