The Dow Jones is in a Historic Funk

The Dow Jones Industrial Average has stumbled through nine consecutive losing sessions, marking its longest slide since 1978. The drop is 3.5%, or 1,582 points, from its recent high above 45,000 in early December.

Driving the Dow’s decline are specific underperformers like UnitedHealth, whose shares plunged 20% this month. The insurer has been hit by regulatory fears over pharmacy benefit managers and fallout from internal turmoil, including the fatal shooting of its CEO. 

Meanwhile, stocks that initially surged on expectations of pro-business policies—like Caterpillar, Sherwin-Williams, and Goldman Sachs—have seen December declines of over 5% as investor sentiment shifts.

This sell-off coincides with modest economic jitters, such as a slight rise in jobless claims. Yet, there is still optimism in the market. Analysts point out that the S&P 500 hit a record high earlier this month and sits less than 1% below that level, while the Nasdaq Composite continues to post gains. These indices, unlike the Dow’s price-weighted structure, better capture the strength of tech giants like Amazon, Microsoft, and Apple, all up at least 9% this month.

What Does This Mean for Me?

Historically, the Dow has struggled to keep pace with modern market realities. Its narrow focus on 30 stocks leaves it less reflective of the economy, compared to broader benchmarks. While concerns over its methodology persist, investors see the current pullback as a pause rather than a trend. The Federal Reserve’s upcoming decision could provide the catalyst for a rebound.