• The Dow Jones accelerated to further declines, falling almost 0.8%.
• Losses are concentrated in the Dow because investors remain unaware of the Fed’s actions.
• Continued declines in key health and technology stocks are dragging the Dow even lower.

The Dow Jones Industrial Average (DJIA) fell another 360 points to a low on Tuesday as losses in the key index accumulate and begin to gather speed. Investors have been chasing Federal Reserve (Fed) interest rate cuts since last December, but now concerns about getting too much of a good thing are giving investors a reason to pause. The Dow recovered behind schedule in the US session, but still ended the day in the red with a loss of 270 points, or -0.63%, losing its ninth consecutive session with a loss for the first time in half a century.

The Fed is widely expected to deliver another quarter-point rate cut on Wednesday, lowering its target rate to a range of 4.25% to 4.5%. The federal funds rate peaked at 5.0%-5.5% in July 2023, and investors clamored for interest rate cuts to provide funding relief for 13 straight months before the Fed finally delivered a massive rate cut in September interest rates by 50 basis points, and then made another interest rate cut of 25 basis points in November. Now investors have no doubts about the Fed’s moves on interest rates and wonder whether the US central bank will go too quick or too far in the wake of the latest US economic data.

Some investors are starting to take a tentative stance amid political threats from skyrocketing inflation from incoming President Donald Trump, according to a December CNBC Fed Survey. Roughly one-third of respondents noted that it may be time for the Fed to reassess its rate-cutting strategy.

Stock markets initially surged on the news of Trump’s decisive election win, but now those same animal spirits are beginning to wonder whether the threat of global tariffs, sweeping deportation policies, and entering into unilateral trade wars with all of the U.S.’s major trading partners at the same time might not be as positive for share prices as many investors initially thought. The uncertainty about the policy’s effects adds to the uncertainty among some analysts, who recall Trump’s campaign promises to renegotiate the USMCA trade deal, which he initially negotiated during his first presidency.

Dow Jones News

Even though the Dow Jones was flat on Tuesday, with about half of the index’s securities trading in green, concentrated losses in household stocks are dragging the price-weighted board lower. Unitedhealth Group (UNH) continues to decline as public opinion of health insurance providers declines even further in the wake of the murder of United Health CEO Brian Thompson. On the same day that Brian Thompson was killed, UNH shareholders celebrated windfall gains for the health care company that were seen to be primarily due to an raise in insurance claim denials at the health care giant. UNH fell an additional 3.5% on Tuesday, testing $480 per share after hitting an all-time high of $630.73 in November.

Adding to the Dow’s losses was a decline in shares of Nvidia (NVDA), which fell another 1.7% that day and fell below $130 per share for the first time since mid-October. Investors may be concerned that Nvidia’s broad push to provide computing power to the AI ​​space could run into problems as widespread reports of overheating on Nvidia chip solutions grow.

Dow Jones Price Forecast

Tuesday’s 330-point decline in the Dow means the major stock index will record its longest overnight losing streak, with the DJIA on track to close in the red for the ninth consecutive session. The Dow broke above the 50-day exponential moving average (EMA) for the first time since behind schedule October, when price action tested a technical low near the 42,000 level.

In early December, the Dow closed above 45,000 points for the first time in history, but the short-term decline caused the DJIA to lose 3.8% from top to bottom. While the key stock index is under bearish momentum, bidders are likely to be hesitantly waiting for a fresh bounce from the key 50-day EMA with an immediate price low near the recent low of 43,000.

Dow Jones daily chart