The Dow Jones Industrial Average fell for the ninth straight session on Tuesday, marking its longest losing streak since 1978. The 30-stock index dropped 267.58 points, or 0.61%, to close at 43,449.90. The Nasdaq Composite and the S&P 500 also declined, falling 0.32% and 0.39%, respectively.
The Dow’s slump began shortly after hitting an all-time high of over 45,000 earlier this month. Analysts attribute the decline to a sector rotation, with investors shifting from old-economy stocks, which dominate the Dow, into technology stocks. David Russell, global head of market strategy at TradeStation, said, “Wall Street is waking up to the fact that a Trump presidency might not be as great for stocks as some people hoped.
Financials and industrials jumped on his win but now face higher rates and trade uncertainties, and healthcare faces its greatest political risks in recent memory.”
Investors are also cautious ahead of the Federal Reserve’s interest rate decision on Wednesday. Traders are pricing in a 95% chance of a quarter-point cut, amid concerns that the Fed’s action could either risk a stock market bubble or spark further inflation. Jeff Kilburg, CEO of KKM Financial, noted the impact of end-of-year dynamics, stating, “The Mag 7 performance chasers are taking one last sprint towards 2024 year-end, leaving the rest of the S&P 500 stocks on the sidelines and kicking the Dow to the curb.”
In other market news, Tuesday’s retail sales figures exceeded economists’ expectations, adding to the debate over the necessity of the Fed’s anticipated action.
Dow’s longest decline since 1978
Beverage stocks could face significant risks in 2025, according to Evercore ISI. Senior Managing Director Robert Ottenstein cited factors such as a strong U.S. dollar and potential tariffs on exports proposed by President-elect Donald Trump as potential challenges.
Additionally, policy shifts under Robert F. Kennedy Jr., Trump’s nominee for Health and Human Services secretary, could affect the sector. Teva Pharmaceuticals surged more than 26% and hit a new 52-week high after announcing positive results for duvakitug, its joint antibody treatment with a pharma giant for inflammatory bowel disease, showing promising Phase 3 development plans.
Cocoa prices hit record highs on Tuesday, with the New York March contract rising nearly 1% to $11,933 per metric ton. This surge is largely due to concerns over adverse weather conditions and supply tightness in West Africa, which produces a significant portion of global cocoa. The S&P 500’s advance-decline (A/D) line has fallen for 11 consecutive sessions, its longest streak since at least 2001.
Larry Benedict of The Opportunistic Trader noted that this is a critical indicator of market breadth and might signal broader market weaknesses than the Dow’s slide alone. As 2024 draws to a close, both investors and analysts will closely monitor these trends and potential policy impacts, keeping a keen eye on sectors vulnerable to sudden market shifts and political developments.
