On Tuesday, the stock market made history as the Dow Jones Industrial Average experienced its first nine-day downward trend since 1978. The average of 30 stocks fell by 267.58 points, equivalent to a 0.61% decrease, concluding the day at 43,449.90. The S&P 500 dropped by 0.39%, finishing at 6,050.61, while the Nasdaq Composite decreased by 0.32%, closing at 20,109.06.
The Dow’s streak of losses began the day following its historic closure above 45,000 for the first time earlier this month. This unusual development occurs despite the overall market performing well, as the S&P 500 achieved a new peak on December 6 and currently hovers less than 1% from that mark. The Nasdaq set a record just the day before.
Dow’s longest decline since ’78
The declines in the Dow can be attributed to a shift towards technology stocks while moving away from some traditional stocks that performed well in November after the reelection of President-elect Donald Trump. Within the tech sector, certain stocks, including a newly added member to the Dow from November, have faced challenges despite recent advancements in technology. “Wall Street is gradually coming to realize that a Trump presidency may not necessarily yield the stock market benefits that some anticipated,” remarked David Russell, the global head of market strategy at TradeStation.
“Financials and industrials surged post-election, but could soon encounter challenges from rising rates and trade uncertainties, while healthcare is facing significant political risks not seen in a long time.”
A primary concern that has led to profit-taking in non-tech stocks is the impending Federal Reserve interest-rate announcement scheduled for Wednesday. Market data currently indicates a 95% likelihood of a quarter-point reduction. Nonetheless, there are worries among investors and economists that the central bank might be headed for a misstep, potentially leading to a stock market bubble or triggering increased inflation.
“The performance chasers of the Mag 7 are making a last dash toward the end of 2024 in December, leaving other S&P 500 stocks behind and sidelining the Dow,” said Jeff Kilburg, CEO of KKM Financial. The retail sales figures for November exceeded economists’ expectations released on Tuesday, which further fueled concerns that the Federal Reserve might be implementing measures unnecessarily.
