The Dow Jones Industrial Average (DJIA) dropped around 400 points on a quiet Friday. Holiday markets were trading on the low side and as a result, the Dow ended the week flat.
Thin Volumes Due to Holidays
Most investors are still away from the markets because of holidays. These thin volumes have made the Dow Jones about a full percent lower. Holiday market flows are affecting equities. There’s a broad-base cooling effect on the long-running tech rally. Investors are doing some light profit-taking before the new year begins. Also, with a thin data release schedule this week and another midweek holiday next week, equity indexes are likely to stay tepid in the near term.
Fed’s Pivot Affects Market Expectations
Traders are still dealing with the Federal Reserve’s (Fed) recent change in expectations. The Fed now expects fewer rate cuts in 2025 than before. According to its latest Summary of Economic Projections (SEP), policymakers only anticipate another two quarter-point rate cuts next year. This has lowered the market’s hopes for a steeper decline in the main reference rate.
Dow Jones’ December Performance
Despite having a good year where the Dow Jones climbed nearly 21.5% from bottom to top, the major equity index isn’t doing well in December. It’s losing ground and cutting into November’s gains. Almost all of the Dow’s listed securities are in the red on Friday. Nvidia (NVDA) is among the big losers, falling over 2% and going back below $137 per share.
Nvidia’s Concerns
Nvidia seems to have ignored recent reports about an overheating problem with its latest Blackwell AI-focused chipset. But now, there are new troubles for the AI-fueled tech rally. Investors are thinking about the possibility of stricter restrictions on Chinese access to US-manufactured silicon solutions. A large amount of Chinese demand for recently-developed AI-focused chipsets could hurt Nvidia’s profit expectations if regulations block trade.
Dow Jones Price Forecast
The Dow Jones’ great run in 2024 seems to be taking a break after declining for three consecutive weeks. The DJIA is nearly 5% below its record highs above 45,000, and it’s now testing just below the 43,000 mark.
Technical Levels
The Dow Jones has fallen below its 50-day Exponential Moving Average (EMA) near 43,345 for the second time in two months. However, the price action is still well above the 200-day EMA near 40,960 as bids found a technical floor near 42,000.
Related topics：
