Investing.com – The index fell more than 1.8% last week, marking its second consecutive week in the red, as concerns mount ahead of Wednesday’s Fed meeting.
Since its all-time high on December 4, the Dow Jones has now fallen 2.63%. However, the index remains up 3.8% since Donald Trump’s victory in the US presidential election.
Let us also remember that the fell by 0.64% in total last week, and fell in four of the last five sessions. The fared better, with a gain of 0.34% over the week.
As for the Fed meeting expected this week, investors are 100% confident that the central bank will cut rates by 25 basis points this week, according to the .
However, for the next meeting in January, the probability of a status quo is almost 80%. Thus, the challenge of this week’s Fed meeting will be above all to glean clues to know whether we should actually expect a pause in the rate cut at the start of 2025, which would be negative for the Dow Jones and actions in general.
Note that several analysts believe that after a large rebound following President-elect Donald Trump’s victory in November, which benefited a wide range of stocks, the stock market appears to have returned to a narrow movement focused on technology during of the last days.
This explains why the Dow Jones, with its strong industrial component, underperformed the other major American indices.
“The magnitude that we’re seeing is really starting to dissipate a little bit. This is now a much more concentrated rally in a few stocks. And I don’t know how long it can last, but there is a chance that it will continue at least until the end of the year, “said Joe Mazzola, chief strategist at Charles Schwab during a CNBC show Friday.
Outside of the Fed meeting, the Dow is likely to react to several other statistics this week, including preliminary December PMIs on Monday, and November retail sales tomorrow on Tuesday.
Finally, note that the Dow Jones and other US indices are currently roughly flat in the futures markets, indicating a neutral opening later today.
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