Dow Jones Industrial Average gives back a 500-point earnings jump

DJIA hits its highest since September 22 on bank results, then finishes lower.
Goldman Sachs beats by 30% and still slips, and Caterpillar and J&J sink.

Goldman Sachs (GS) earned $17.01 a share in the third quarter against a forecast near $13.00. JPMorgan Chase (JPM) missed on profit and revenue but raised its 2026 forecast for net interest income, what it earns on loans minus what it pays on deposits. Both stocks finished lower, so the reward for beating forecasts by 30% was a smaller loss than JPMorgan's.

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The Dow Jones Industrial Average is weighted by share price, so a $1 move in any member is worth about 6 index points. Goldman, at about $890, is its most expensive stock. At their highs Goldman and UnitedHealth (UNH), which beat forecasts and raised its outlook, were adding about 350 points between them, and none of it was left by the final bell.

Falls in Caterpillar (CAT) and Johnson & Johnson (JNJ) subtracted about 250 points from the Dow, more than the index lost. Citi cut the share price it expects for Caterpillar by $150 to $950, doubting that data-centre spending for artificial intelligence justifies the current one. Johnson & Johnson beat forecasts and raised its outlook, but a $5.5 billion charge to resolve talc lawsuits left its quarterly profit at $0.09 a share.

The Dow reached just above 52,300 before the opening bell, about 500 points above Monday's close and its highest since September 22. It fell through 52,000 to the 51,750 area in the first nine five-minute bars after the bell, then made its low near 51,600 and finished just under 51,700.

On the charts

The Dow traded above its 50-day Exponential Moving Average (EMA) near 52,000 for the first time in more than a month and finished back below it. The index has now given back more than a third of its climb from the October 1 low just above 50,500, which held just above the 200-day EMA.

Dow Jones daily chart

Dow Jones FAQs

What is the Dow Jones?

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

What factors impact the Dow Jones Industrial Average?

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

What is Dow Theory?

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

How can I trade the DJIA?

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

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