Dow Jones Industrial Average recovers as January CPI cools, rate cut bets surge

💡 DMK Insight

The DJIA’s 220-point rebound signals a potential short-term recovery, but traders should be cautious. After a steep 669-point drop, the market’s volatility is heightened, driven by fears surrounding AI disruptions. This bounce could be a dead cat bounce or a genuine reversal, so it’s crucial to watch for confirmation in the coming days. Key resistance levels to monitor are around 49,800, where sellers may re-emerge. If the index can hold above 49,500, it could indicate a shift in sentiment. However, the underlying fears about AI’s impact on various sectors remain, which could lead to further sell-offs if not addressed. Traders should also keep an eye on related sectors like tech and real estate for potential ripple effects, as these areas are particularly sensitive to AI developments. The next few trading sessions will be critical for gauging whether this recovery has legs or if it’s just a temporary respite.