Live Markets: Transports are not onboard Wall Street's rally
16/09/2025 14:15
U.S. equity index futures mixed: Nasdaq 100 futures up ~0.2% Euro STOXX 600 index down ~0.4% Dollar dips, gold hits record; crude up >1%, bitcoin ~flat U.S. 10-Year Treasury yield rises to ~4.05% Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com TRANSPORTS ARE NOT ONBOARD WALL STREET'S RALLY Wall Street's indexes are scaling new peaks but the Dow transports index continues to lag, raising questions about the sustainability of the rally through the lens of Dow Theory. One of the oldest stock market forecasting methods, Dow Theory holds that if the Dow Jones Industrial Average .DJI hits a record the Dow Jones Transportation Average .DJT must follow suit with its own high to confirm the trend. The two price-weighted averages, however, have been out of sync for months. The 30-member industrials index notched a record close on Friday and has climbed about 11% year-to-date. In contrast, the 20-member transport index, often seen as a barometer of the U.S. economic growth, is still about 12.7% below its November 2024 all-time high and has declined about 2% this year. The transport index has been dragged lower by steep declines in key constituents, including United Parcel Service UPS.N, down 33.4% year-to-date, Matson MTXX.N, which has fallen 28%, and American Airlines AAL.O, off 24%. The moves come as the S&P 500 .SPX and Nasdaq .IXIC have notched a series of record highs including on Monday driven by optimism over AI and accommodative monetary policy. Dow Theory, was conceptualized in the late 1890s by Charles Dow, founder of The Wall Street Journal, which is published by Dow Jones & Co. "Conceptually, (Charles) Dow observed in the late 1800s that raw materials would need to be transported via railroads before economic expansion could begin. Subsequently, robust rail activity would typically portend favorable economic conditions for industrial companies," notes Adam Turnquist, chief technical strategist for LPL Financial. "The key question now is whether the TRAN (transports index) will confirm the move, or if its divergence signals a potential false breakout in the INDU (industrials index)," Turnquist said in a note. (Medha Singh) ***** EARLIER ON LIVE MARKETS: FTSE 250 TURNING THE CORNER CLICK HERE GOLD'S RECORD SURGE CLICK HERE EUROPE VS U.S. STOCKS: WHERE NEXT? CLICK HERE STOXX DIPS, RECRUITERS WEAK AFTER STHREE WARNING CLICK HERE EUROPE BEFORE THE BELL: BUOYANT MOOD CONTINUES CLICK HERE FED OPENS SEPTEMBER MEETING WITH INDEPENDENCE UNDER THREAT CLICK HERE The Dow Jones Industrials versus Transport index https://fingfx.thomsonreuters.com/gfx/mkt/dwvklnnyepm/The%20industrials%20versus%20transport%20in%202025.png