Trading a whisker from all-time highs made in November of last year, the Dow Jones remains the biggest gainer among its US-facing counterparts over the last few weeks.
While the start of the year can be remembered as predominantly ‘risk-on’, benefitting speculative stocks with higher growth potential, mainly courtesy of innovations like artificial intelligence, the winds of change are blowing as we enter Q3.
What’s changed?
In a few words, a prevailing feeling of uneasiness surrounds expanding US federal debt, trade policy, and Federal Reserve monetary policy, which has dampened expectations for the US economy for the remainder of 2025.
In turn, this has somewhat shifted flows into US equities, with more reliable, stable and traditional stocks being priortised over speculative technology stocks, directly benefitting the Dow Jones, which is comprised of the 30 most prominent publicly traded companies in the United States.
There is also atleast some notion that US tech stocks remain overval, with the Nasdaq-100 boasting the highest P/E ratio of any major stock index globally, and some 33% higher than the Dow.
Although the Dow Jones does include some technology stocks, it has much less exposure than other indices, which has allowed the DJIA to outperform in recent memory.
For now, it would appear the both healthcare and pharmaceutical companies are taking much of the limelight, with Merck, UnitedHealth and Amgen amongst some the biggest gainers in yesterday’s session.
Otherwise, and on the topic of monetary policy, recent commentary from Federal Reserve policymakers has also bolstered the recent rise in Dow pricing. Naturally, any suggestion that rates could be cut soon will typically benefit US equities, the Dow Jones included.
