The Dow Jones Industrial Average was threatening to enter the history books Tuesday with its first nine-day losing streak since the 1970s in sight. The 30-stock average shed 322 points, or 0.7%.
The S&P 500 lost 0.4% , while the Nasdaq Composite ticked down 0.3%. The Dow’s losing streak began the day after it closed above 45,000 for the first time ever earlier in the month.
The Dow anomaly comes at a time when the broader market is doing well. The S&P 500 hit a new high on Dec. 6 and sits less than 1% from that level. The Nasdaq hit a record on Monday.
Driving the Dow’s losses has been a rotation into technology stocks and out of some of the more old-economy stocks that gained in November following the reelection of Donald Trump. Those stocks dominate the Dow, rather than tech.
What’s strange, however, is that Nvidia, a new tech member of the Dow that joined in November, has also struggled despite the tech sector’s recent gains, slipping into correction territory Monday. Tesla was higher again on Tuesday, though Broadcom lost 5%.
“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.
“Financials and industrials jumped on his win but now may have to face higher rates and trade uncertainties, and healthcare faces its greatest political risks in recent memory.”
Some of the concern driving some profit-taking in the nontechnology stocks centers around the upcoming Federal Reserve interest-rate decision Wednesday.
Traders are pricing in a 95% chance of a quarter-point cut, according to CME Group’s Fed Watch tool. However, there’s concern among investors and economists that the central bank could be making a mistake and risking 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.
