The Dow Jones Industrial Average surrendered early gains after a Fed official reinforced hawkish policy signals ahead of the July meeting.
The Dow Jones Industrial Average reversed a 600-point intraday rally to trade near 52,250, down nearly 300 points, as hawkish Fed commentary overshadowed strong consumer sentiment data. The index briefly touched 52,600 after the University of Michigan’s July Consumer Sentiment Index surged to 54.4, its highest since February, while one-year inflation expectations fell to 4.2%.
Earlier data offered mixed signals: housing starts hit a 1.43 million annualized pace, beating the 1.31 million consensus, but building permits softened to 1.37 million, and industrial production rose just 0.1% month-over-month. The session’s low was printed below 52,000 before the sentiment release triggered the rebound.
The rally faded after a voting Fed member, speaking ahead of the pre-meeting blackout, signaled continued hawkish policy, prompting algorithms to unwind positions. The broader market also retreated, leaving the Dow nearly flat for the week.