The New York Stock Exchange experienced a decline as investors anxiously await the Federal Reserve’s interest rate decision. Major indices fell, with the Dow marking its ninth straight negative session. Key factors influencing the market include UnitedHealth Group’s struggles and strong retail sales data, which shifted monetary policy expectations. While Nvidia’s drop affected the Nasdaq, optimism persists as some analysts believe potential rate cuts could support a market rebound. Notably, Teva Pharmaceuticals and Pfizer saw significant stock increases.
Market Downturn Ahead of Fed Decision
The New York Stock Exchange closed lower on Tuesday, reflecting anxiety among investors as they await the U.S. central bank’s (Fed) decision on interest rates this Wednesday. Traders are increasingly questioning the market’s momentum, leading to a decline in major indices. The Dow Jones Industrial Average dropped by 0.61%, while the Nasdaq and the S&P 500 fell by 0.32% and 0.39%, respectively. This downturn marks the Dow’s ninth consecutive negative session, an occurrence not seen since 1978.
Impact of Key Stocks and Economic Indicators
According to Kim Forrest from Bokeh Capital Partners, the Dow’s significance is diminishing, largely due to how its weighting system operates—based on stock price rather than market capitalization. A major factor in the Dow’s poor performance is UnitedHealth Group, which has been reeling from the fallout following the murder of the head of its subsidiary. This has significantly affected its stock price, dragging down the index as it holds a large weight compared to other components.
Despite starting off in the red, the market’s decline solidified after the Commerce Department reported a 0.7% increase in retail sales for November, surpassing economists’ expectations of 0.5%. José Torres from Interactive Brokers noted that this strong consumption data impacts monetary policy expectations, leading traders to anticipate fewer rate cuts by the end of next year. Currently, there is nearly a 40% probability that there will be only one more rate cut until 2026 after the expected decision this week.
Amidst this uncertainty, Kim Forrest pointed out the confusion in the data, questioning whether the focus should be on ongoing inflation or consumer strength. Some investors, according to her, are cautiously reclaiming portions of their investments. On the Nasdaq front, the notable decline of AI leader Nvidia (-1.22%) is affecting the entire market due to its substantial market capitalization, with the stock losing over 12% since early November. Alongside Nvidia, the semiconductor sector faced pressure from Broadcom (-3.91%) and Marvell Technologies (-10.04%).
Art Hogan of B. Riley Wealth Management remains optimistic, suggesting that Wall Street could rebound if the Fed’s upcoming projections indicate potential rate cuts for next year. On a brighter note, Teva Pharmaceuticals saw a significant boost (+26.47%) following promising clinical trial results for a new intestinal inflammation treatment developed with Sanofi. Additionally, Pfizer (+4.67%) benefited from forecasts suggesting that its 2025 revenue will match current fiscal year projections, prompting investor interest in its anticipated increase in net earnings per share for the next fiscal year. Meanwhile, Tesla (+3.64%) continues its upward trajectory, buoyed by enthusiastic investor sentiment since Donald Trump’s electoral victory, with CEO Elon Musk closely associated with the former president.