The Dow Faces Risk of Achieving a Milestone Not Seen in Over 50 Years

New York — The last time the Dow Jones Industrial Average experienced a consecutive decline for 10 days, Gerald Ford was in the White House. Currently, the index is on the verge of achieving this rare and troubling milestone not seen in over 50 years.

On Wednesday, the Dow dropped approximately 850 points, or 2%, following a policy statement from the Federal Reserve. The Fed revised its forecast to predict only two interest rate cuts in 2025, down from an earlier estimate of four. This shift indicates that inflation is expected to remain persistently above the target range for a longer duration than previously anticipated. According to FactSet data, only 11% of investors foresee a rate cut at the Fed's January meeting.

The Dow has now experienced nine straight days of losses, marking its longest losing streak since February 1978 during Jimmy Carter's presidency.

Interestingly, this downturn in the Dow contrasts with broader market performance, which has remained relatively strong. Despite its recent losses totaling about 5%, other indices like the S&P 500 and Nasdaq Composite have been near record highs before experiencing sharp declines on Wednesday; the S&P fell by 2.5% and Nasdaq by 3.3%.

Investors had anticipated a quarter-point rate cut from the Fed but were taken aback by their announcement of just two cuts in 2025—implying tighter monetary conditions ahead. In response to what Jay Hatfield, CEO and CIO at Infrastructure Capital Advisors, termed a “hawkish cut,” both stocks and bonds fell sharply.

A significant contributor to the Dow's decline has been UnitedHealth Group, which has seen its shares fall by 15% this month after CEO Brian Thompson was tragically shot. Ironically, UnitedHealth’s stock rose about 3.4% on Wednesday amid this turmoil.

Nvidia, another key player since joining the Dow last November, has also added pressure to the index. Although Nvidia’s stock has surged over 180% this year overall, it has slipped about 5% over the past month contributing further to the Dow's drop.

The last time such an extensive losing streak occurred was back in September-October of 1974 when it fell for eleven consecutive sessions.

Despite these ongoing challenges, it’s worth noting that the Dow remains up by approximately 14% this year—an increase of more than 5,000 points since early January and over 600 points (1.6%) higher than its level on Election Day.