- The Dow Jones lost 400 points on Friday.
- Holiday markets traded on the low side, with the Dow ending the week flat.
- Another midweek holiday next week will reduce market volumes.
The Dow Jones Industrial Average (DJIA) fell about 400 points on a quiet Friday. Most investors are still out of the market for the holidays, and weak volumes sent the Dow Jones roughly a full percentage point lower.
The holiday market movements in stocks are in full swing, with a broad cooling effect on the long-term technological upswing as investors raise stakes and take some profits ahead of the transition to the new year. A weak schedule of data releases this week, followed by another midweek holiday next week, leaves stock indexes on the tepid side in the short term.
Traders are still grappling with the Federal Reserve’s (Fed) recent pivot to expectations of a smaller rate cut in 2025 than previously expected. According to the Fed’s latest Summary of Economic Projections (SEP), policymakers expect just two more quarter-point interest rate cuts over the next year, undermining market expectations for a steeper cut in the key benchmark.
Dow Jones news
Despite a tumultuous year overall that saw the Down Jones climb nearly 21.5% from the bottom to the top, the major stock index still has coal in the stock as December moves deeper into the red and pares November’s strong gains. All but five Dow stocks were in the red on Friday, led by Nvidia (NVDA), which fell more than 2% to return below $137 a share.
Nvidia appeared to shrug off recent reports that its latest AI-focused Blackwell chipset may have had overheating problems, but fresh trouble has emerged for the AI-fueled tech boom as investors weigh the possibility of tighter restrictions on China’s access to the US. silicon solutions produced. The overwhelming amount of Chinese demand for recently developed AI-focused chipsets could leave Nvidia’s profit expectations in the lurch if regulations hamper trade.
Dow Jones Price Forecast
The Dow Jones’ stellar 2024 streak appears to have taken a breather after falling for three consecutive weeks. The DJIA is down nearly 5% from record highs above 45,000, testing the waters south of the 43,000 mark.
The Dow Jones dipped below its 50-day exponential moving average (EMA) near 43,345 for the second time in as many months, but the price remains well above the 200-day EMA near 40,960 after bids found a technical boundary near 42,000.
Dow Jones daily chart
Dow Jones FAQ
The Dow Jones Industrial Average, one of the oldest stock indexes in the world, is composed of the 30 most traded stocks in the United States. The index is weighted by price, not capitalization. It is calculated by adding the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years, it was criticized for not being broadly representative because it tracks only 30 conglomerates, unlike broader indexes such as the S&P 500.
Many different factors affect the Dow Jones Industrial Average (DJIA). The main one is the overall performance of the components revealed in the quarterly earnings reports. US and global macroeconomic data also contribute as they influence investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also affects the DJIA because it affects the cost of credit, which many corporations rely heavily on. Therefore, inflation can be a major driver, as well as other indicators that influence the Fed’s decisions.
The Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. The key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends when both are moving in the same direction. Volume is a confirmatory criterion. The theory uses elements of peak and trough analysis. Dow theory posits three phases of a trend: accumulation, when the smart money starts buying or selling; public participation, when the general public is involved; and distribution, when the smart money comes out.
There are several ways to trade the DJIA. One is the use of ETFs that allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures allow traders to speculate on the future value of the index, and options give the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds allow investors to buy shares in a diversified portfolio of DJIA stocks, thereby providing exposure to the entire index.
