$Dow Jones Industrial Average (.DJI.US)$ Recently, there has been a continuous decline, opening significantly lower on Tuesday, with an intraday drop exceeding 380 points and a daily decline reaching 0.87%. As of Tuesday's close, the Dow Jones fell over 260 points, marking its ninth consecutive trading day of decline, which is also the longest streak since 1978. The Dow Jones briefly broke through the historical high of 45,000 points at the beginning of this month, but began this round of prolonged decline on the second trading day thereafter.

The consecutive eight-day decline at Monday's close is the longest for the Dow Jones since 2018. According to FactSet, the Dow Jones once experienced 11 consecutive days of decline in 1974, and apart from that, the Dow Jones Index has never recorded declines for 10 days or longer.

However, it is worth noting that although the number of consecutive days of decline for the Dow Jones is historically significant, the overall decline remains mild, with Tuesday's low being less than a 4% pullback from the historical high reached in early December.

In fact, the Dow Jones's exceptionally poor performance occurs against the backdrop of a strong overall trend in the US stock market, making it a tale of two extremes.$Nasdaq Composite Index (.IXIC.US)$Just created a historic new high this past Monday.$S&P 500 Index (.SPX.US)$It is only about 1% away from the historical high.

Reasons for the Dow Jones decline.

The reason driving the decline of the Dow Jones is that funds are flowing out of stocks in some traditional economic sectors and shifting towards Technology stocks. These traditional economic stocks dominate the Dow Jones, unlike the Nasdaq Composite Index, where Technology stocks dominate. After Trump's victory in the USA presidential election, traditional economic stocks soared in November, but have shown clear weakness recently. Nevertheless, the Dow Jones is still about 3.5% higher than it was on the day of the USA election.

Industry insiders pointed out that part of the reason for the profit-taking in non-Technology stocks is the upcoming Federal Reserve interest rate decision this Wednesday. According to the CME Group's FedWatch Tool, traders expect a 97% probability of a 25 basis point rate cut at the December meeting.

However, some investors and economists are concerned that the Federal Reserve's rate cut measures could be a mistake that may trigger a bubble in the USA stock market or lead to a resurgence of inflation. Data released on Tuesday showed that November USA retail sales outperformed economists' expectations, further raising concerns about potential unnecessary actions by the Federal Reserve. Due to these concerns, the market generally expects that the Federal Reserve will not cut rates in January next year.

It is also worth mentioning that,$NVIDIA (NVDA.US)$Joined the Dow Jones in November. As a new technology component stock in the Dow Jones, NVIDIA has faced challenges despite the recent strong performance of the Technology Sector, with a cumulative pullback of over 10% from its peak on Monday, entering a technical Adjustment Range. NVIDIA fell again on Tuesday. Analysis from the Wall Street Journal mentions that the AI Industry is undergoing a 'paradigm shift.' As AI large models transition from the pre-training phase to the logical reasoning phase, specialized chips represented by ASICs may gradually replace general-purpose chips represented by GPUs, leading to NVIDIA's recent lackluster performance.

In addition,$UnitedHealth (UNH.US)$(UnitedHealthcare Group) is one of the significant reasons for the recent decline of the Dow Jones. The insurance giant has lost 18% of its Market Cap so far this month, with the sell-off beginning following news of CEO Brian Thompson's tragic death. On Monday, UnitedHealth's stock price fell again, affected by Trump's vow to 'eliminate' intermediaries in the Medical Care industry.

How does Wall Street view this?

David Russell, the Global Markets strategy chief at TradeStation, stated: 'Wall Street is gradually realizing that Trump's re-election may not be as beneficial to the stock market as some expect. The Financial and Industrial Sectors rose due to Trump's election, but may now face higher interest rates and trade uncertainties, while the Medical Care Sector is experiencing the biggest political risks in recent years.'

Ameriprise's chief market strategist stated that the recent consecutive declines in the Dow Jones Index should not necessarily be seen as a sign of future problems. The recent decline represents some profit-taking following significant rises in the past weeks. Expectations surrounding the risks and opportunities presented by Trump's new administration taking office next year have also been moderately adjusted, including whether the Trump 2.0 policy agenda can stimulate stock price increases.

Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, stated that the way the Dow Jones is falling is somewhat strange. Funds continue to flow into technology stocks. This is the dominant theme of this market—AI and Technology. After the election, investors are focusing solely on the positive aspects of Trump's policies. Next year, they will have to pay attention to both the good and the bad, including concerns over Trump's threats to raise tariff rates and large-scale deportations.

Jeff Kilburg, the CEO of KKM Financial, stated that since December, the performance chasers of the Seven Sisters are making a final sprint for the end of 2024, while other S&P 500 constituents are being sidelined, and the Dow Jones is further neglected.

编辑/jayden