The Dow Jones Industrial Average fell 267.58 points, or 0.61%, to 43,449.90 on Tuesday. This marked the index’s first nine-day losing streak since 1978. The Nasdaq Composite dropped 0.32% to 20,109.06, while the S&P 500 slid 0.39% to 6,050.61.
The Dow’s losses have largely been driven by a rotation into technology stocks and out of traditional stocks that gained following President Trump’s reelection. “Wall Street is waking up to the fact that a Trump presidency might not be as great for stocks as some people hoped,” said David Russell, global head of market strategy at TradeStation. Investors are also concerned about the upcoming Federal Reserve interest-rate decision on Wednesday.
Traders are pricing in a 95% chance of a quarter-point cut, but there are worries that the central bank could risk a stock market bubble or sparking more inflation. “The Mag 7 performance chasers are taking one last sprint towards 2024 year-end so far in December, leaving the rest of the S&P 500 stocks on the sidelines and kicking the Dow to the curb,” said Jeff Kilburg, CEO of KKM Financial.
Dow faces extended losing streak
November’s better-than-expected retail sales figure added to the unease, intensifying concerns that the Fed may be taking unnecessary action. Despite the current turbulent times, several market experts suggest maintaining a long position in stocks. They point to factors such as a robust economy, expected interest rate cuts in 2025, and a pro-business president taking office soon.
“Big picture, with record earnings, record profit margins, strong productivity, and improving consumer and small business sentiment, it is hard to think that this bull market is over,” stated a Carson Group chief market strategist. The economic landscape remains strong, with the latest retail sales report indicating an economy performing well and supporting strong earnings growth in 2025. Additionally, the transformative potential of artificial intelligence is expected to be a significant driver of market profits and valuation multiples in the coming year.
While the current atmosphere may feel punishing, a closer look suggests the market is weathering a typical fluctuation. Historical wisdom in investing reminds us that stocks don’t go up in a straight line, and no trend lasts forever.
