Can a Nvidia Recovery and Dovish Fed Guidance End the Dow’s Nine-Day Losing Streak?

Can the Dow Jones Break Its Nine-Day Losing Streak?

The Dow Jones Industrial Average has now dropped for nine straight sessions, its longest losing streak in 46 years. On Tuesday, December 17, the index fell 0.61% to close at 43,449.90, slipping below its 50-day moving average at 43,453 for the first time since November. Adding to concerns, key stocks like UnitedHealth Group (UNH) are not only breaking short-term support but also trading below longer-term levels like the 200-day moving average—a bearish technical signal.

Why Has the Dow Been Falling?

Rising Treasury Yields Pressuring Equities

The 10-Year Treasury yield has climbed to 4.403%, adding about 20 basis points this month. Higher yields create competition for stocks, particularly value-heavy names in financials, industrials, and healthcare that dominate the Dow. Rising rates also increase borrowing costs and weigh on future earnings. Goldman Sachs (GS) fell 1.99% to $574.68, reflecting this pressure.

UnitedHealth Group Breaking Critical Support

UnitedHealth Group (UNH), the Dow’s heaviest-weighted stock, has been the largest drag on the index. Closing at $485.52 on Tuesday, UNH is not only far below its 50-day moving average at $577.69 but also its 200-day moving average at $538.37. This combination signals significant technical weakness and increases the risk of further downside unless it stabilizes near the $480 level.

Weakness in Core Dow Components

Caterpillar (CAT) and Sherwin-Williams (SHW) are compounding losses. Caterpillar fell 0.82% to $375.80 and remains well below recent highs, reflecting softening industrial sentiment. Sherwin-Williams dropped 0.61% to $362.79, adding to concerns about cyclical sector momentum.

Salesforce and Chevron Adding Pressure

Salesforce (CRM), another key Dow component, fell 1.66% to $350.57. The stock has been under pressure as concerns about enterprise software spending persist, reflecting broader tech uncertainty. Meanwhile, Chevron (CVX) declined 0.84% to $148.11 as oil prices remain volatile, reducing optimism for energy sector gains.

Tech Stocks Under Pressure

Nvidia (NVDA), which had been a market leader, fell 1.22% to $130.39 and has now lost 17% from its November highs. The sharp drop reflects growing concerns that AI-driven growth stocks may have peaked, which has spilled over into broader sentiment.

Federal Reserve Uncertainty
Investors are awaiting Wednesday’s Federal Reserve rate decision. While a 0.25% rate cut is widely expected, stronger-than-expected November retail sales have introduced doubts about how many cuts the Fed will forecast for 2025. Any hawkish signals could add to selling pressure.

What Could Turn the Dow Around?

Falling Treasury Yields Could Ease Pressure
If the 10-Year Treasury yield moves below 4.2%, equities could catch a bid as borrowing costs ease. Lower yields would particularly benefit interest-rate-sensitive sectors like healthcare, industrials, and financials, which are critical to the Dow’s performance.

UnitedHealth Group Recovery
For the Dow to regain ground, UnitedHealth Group must stabilize. The stock’s decline toward $480 is approaching a critical support level. A rebound above its 200-day moving average at $538.37 would signal improving sentiment and provide a meaningful lift to the index.

Federal Reserve Dovish Guidance
The Fed’s messaging will be key. If policymakers project multiple rate cuts in 2025, investor confidence could improve, easing fears about prolonged tight monetary conditions.

Strength in Dow Heavyweights
A rebound in key names like Caterpillar, Sherwin-Williams, Salesforce, and Chevron would signal improving sector confidence. Salesforce remains a vital component of the tech sector, and any recovery could provide significant upside for the Dow. Similarly, Chevron’s rebound would depend on oil price stabilization, offering potential support.

Tech Stabilization
Nvidia needs to hold current levels near $130 to restore confidence in the broader market’s growth outlook. While tech makes up a smaller part of the Dow compared to other indices, its performance still influences overall sentiment.

Where Could the Dow Go Next?

The Dow is currently trading below both its 50-day moving average at 43,453 and the immediate resistance level around 43,700. On the downside, the next significant support appears near 42,900. Breaking above the 50-day average will be critical for a reversal, but the index’s ability to stabilize largely depends on UnitedHealth Group, Treasury yields, and the Federal Reserve’s tone on Wednesday.

For now, the short-term outlook remains cautious. If yields stabilize and the Fed delivers a dovish signal, the Dow could break its losing streak. However, sustained weakness in major components like UnitedHealth, Salesforce, and Chevron leaves the risk of further declines unless these stocks find firmer footing.

More Information in our Economic Calendar.