Is Wall Street realising that a Trump presidency might not be great for stocks? Dow in a 9-day losing streak, its longest since 1978

Investors on Wall Street are beginning to reassess the implications of Donald Trump’s presidency for the stock market. The Dow Jones Industrial Average has entered a troubling phase, experiencing its longest losing streak since 1978, with nine consecutive days of declines. This downturn has raised questions about the sustainability of the post-election rally that initially buoyed stock prices following Donald Trump’s victory.

Historic losing streak

The Dow closed down 267 points, or 0.6% on Tuesday, marking its ninth straight day of losses. This streak is significant, as it is the first time since February 1978 that the index has faced such a prolonged decline. The Dow’s recent performance contrasts sharply with the broader market, where the S&P 500 and Nasdaq Composite have continued to hover near record highs.

The Dow’s struggles can be attributed to a shift in investor sentiment. Following Trump’s election, there was an initial surge in stock prices, particularly in sectors expected to benefit from his economic policies, such as financials and industrials. However, as the market has adjusted to the realities of a Trump presidency, concerns have emerged regarding potential economic policies that could negatively impact growth and stability.

Reasons for fall

Several factors are contributing to the Dow’s current predicament. Analysts note a narrowing breadth in the market, with many stocks failing to keep pace with the gains seen in technology and other sectors. This shift has led to a rotation away from traditional blue-chip stocks, which dominate the Dow, towards tech stocks that have shown resilience and growth potential.

Moreover, there is growing apprehension about the implications of Trump’s proposed economic policies. Investors are increasingly wary of potential trade uncertainties, rising interest rates, and the political risks associated with healthcare reforms. These concerns have led some market participants to question whether the initial optimism surrounding Trump’s presidency was overly optimistic.

S&P 500, Nasdaq doing well

Despite the Dow’s struggles, the S&P 500 and Nasdaq have remained relatively stable, indicating that the broader market is not uniformly pessimistic. The S&P 500 recently hit a new high, and the tech-heavy Nasdaq continues to attract investor interest. This divergence suggests that while the Dow may be facing challenges, other sectors of the market are thriving, reflecting a complex and evolving economic landscape.