Mapping the Market: How resilient is the stock rally? Dow Theory might have an answer

Avis Budget

29/04/2026 11:00

By Terence Gabriel

April 29 (Reuters) - As the S&P 500 and Nasdaq Composite rack up record highs in the face of worries about geopolitics, inflation and AI, technical analysts are studying the mechanics of the Dow to predict how resilient the bull run might be.

The answer might lie in the Dow Theory, a foundational set of tenets that helped develop modern technical analysis. According to the theory, a new bullish trend in the stock market must be confirmed by both the Dow Jones Industrial Average and the Dow Jones Transportation Average to be durable; otherwise it is suspect.

So far, it’s an open question. The Dow Jones Industrial Average hasn’t made a record closing high since February 10, before the U.S.-Israeli war with Iran started, though it was tantalizingly close on Tuesday, when it finished just 2.1% below its all-time peak, according to LSEG data.

Transports, meanwhile, hit a closing high on April 21, but the index has slumped since. Adding to the noise in the Transports high was a short-lived meme-stock-type rally in the car rental company Avis Budget Group.

For the bull market to be confirmed under the Dow Theory, the Industrials must surpass their February peak soon.

What the chart shows:

The DJI has failed to reach a record high since February, even as the S&P 500 and Nasdaq have powered ahead

Dow Transports recently struck a new peak

However, the DJI's lack of participation may lead to doubts about the rally's durability

(Daily markets commentary from Reuters analysts on the signals financial charts are sending - and what they might mean.)​

DJTvsDJI04282026Web https://fingfx.thomsonreuters.com/gfx/buzz/gdvzaayempw/image-1777406645319.png

 (Terence Gabriel is a Reuters market analyst. The views expressed are his own. Editing by Lisa Shumaker)

 ((terence.gabriel@tr.com))