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All-time high in the Dow Jones is taking its time

Dear traders, dear stock market friends.

While the S&P 500 and the Nasdaq 100 have already hit several new all-time highs in recent weeks, the Dow Jones, at 49,526 points, is currently still just below its last all-time high from early February, thus showing relative weakness. Over the past trading week, the Dow treaded water and closed virtually unchanged, down 0.17%. In addition to the ongoing AI euphoria, which is providing tailwinds for the stock markets, the focus was particularly on inflation data and bond yields, which created moderate headwinds.

Relative weakness in the Dow Jones

The recent stock market rally, which began in early April, was primarily driven by technology, semiconductor, and AI stocks, gaining additional momentum from strong quarterly earnings.

While the Dow Jones was also able to gain in recent weeks, it lagged significantly behind the S&P 500 and especially the Nasdaq 100. The most important reason for this lies in the composition of the index: 

While the Dow Jones also includes several heavyweight companies from the tech and AI sectors, such as Nvidia, Apple, Microsoft, Salesforce, IBM, and Cisco, the index is significantly less focused on large AI and growth stocks compared to the Nasdaq 100 and the S&P 500. Furthermore, as a price-weighted index, the Dow Jones functions differently from the market-capitalization-weighted major benchmark indexes: weighting is not automatically given to the largest companies, but rather to stocks with the highest prices. Consequently, the index remains more influenced by traditional industrial, financial, healthcare, and consumer stocks. It is precisely this broader and somewhat more defensive structure that explains why the Dow Jones has not benefited as strongly from the ongoing AI rally as the Nasdaq 100 and the S&P 500.

Since the start of the year, the Dow Jones has risen by about 3.0%. By contrast, the S&P 500 has already gained about 8.2%, and the Nasdaq 100 has risen by as much as 15.4%.

Hot inflation data as a potential drag?

The latest U.S. inflation data remains a potential headwind for the Dow Jones and the broader stock market. Consumer prices rose 3.8% year-over-year in April, up from 3.3% in March. Core inflation also picked up again, reaching 2.8% year-over-year, up from 2.6% in the previous month. Particularly notable was the sharp rise in energy prices, which increased by 17.9% year-over-year.  

Price pressure was even more pronounced on the producer side. The producer price index rose by 1.4% month-over-month in April. Year-over-year, producer prices increased by 6.0%. This was the sharpest increase since December 2022 and was well above market expectations.

This means the risk of inflation returning remains a real risk for the current year. Should inflationary pressures continue or even intensify, bond market yields could rise further, not only dampening hopes of interest rate cuts, but even leading to interest rate hikes.

This would be particularly burdensome for interest-sensitive growth stocks on the one hand; on the other hand, however, such an environment could also slow down the entire stock market, as higher financing costs and rising input prices would squeeze the margins of many companies.

The most important price levels of the primary uptrend

Despite the current relative weakness, the primary uptrend in the Dow Jones remains completely intact. The defense of the long-term support zone at 45,000 points was an important bullish signal. From there, the index has already risen to currently 49,526 points, which corresponds to a rally of around 10 percent.

Dow Jones weekly chart

The moving averages on the daily chart now also signal a clear upward trend again. Should the consolidation or correction broaden in the coming days, this would not yet harm the long-term trend, as long as the index does not fall back below the EMA band. 

Dow Jones daily chart

The crucial long-term support remains at the 45,000-point mark for now. Should the Dow break downwards below this price area, the upward trend would be significantly broken or reversed.

Conversely, a breakout on the weekly closing price to a new all-time high above 50,000 points would be a clear confirmation of the prevailing upward trend. 

Author: Tobias Schmid
Date: 05/18/2026

A man with slicked-back hair and a trimmed beard, wearing a navy blue suit jacket and a white shirt, looks into the camera with a slight smile. Industrial background.
Tobias Schmid

Tobias Schmid has been a trader and analyst since 2008 and specializes in trading futures options and equity options. His strategies and analysis methods are based on a combination of technical analysis, intermarket analysis and sentiment analysis. Tobias Schmid is also the founder of Fomo Financea financial website for active traders, investors and options traders.

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