Key points:
- Dow logs ninth losing day
- Market focus shifts to Fed
- 95% of traders eye rate cut
30-stock blue-chip index logged its ninth straight losing day just as the Fed is getting ready to drop its final market-shaking rate decision of 2024.
- The Dow Jones Industrial Average
DJI ticked lower for the ninth consecutive day on Tuesday, notching its longest declining run since 1978. The blue-chip index shed 267.58 points, or 0.6%, to sign off at 43,449.90. Its two peers also didn’t make it to green territory with the S&P 500 giving up 0.4% and the tech-heavy Nasdaq Composite erasing 0.3%. Is the Santa rally canceled this year? - The three major benchmarks are consolidating ahead of a key event. Later today, the Federal Reserve will update its benchmark interest rate and traders expect to see a reduction of 25 basis points. If true, that will wrap up a monthslong campaign of dropping borrowing costs in efforts to support economic growth while keeping inflation under control (mostly). Inflation has been stubbornly above the Fed’s 2% target.
- Fed Chair Jay Powell, who will appear for a press conference after the rate announcement, has said the economy is in good shape and that is leading officials to seek a December rate cut. But since the Fed is data dependent, Powell hasn’t ruled out any surprise last-minute U-turns that could catch markets unprepared (and actually cancel the Santa rally). Still, as much as 95% of traders expect a rate cut today, according to the FedWatch tool by the CME, which could mean things can get ugly if the Fed stays put.
