Dow Jones Slumps as Tech Retreats Amid Holiday Thin Trading

The Dow Jones Industrial Average (DJIA) experienced a significant decline on Friday, shedding nearly 400 points. This downturn occurred amidst thin holiday trading volumes, with many investors remaining on the sidelines. The broader market also cooled, particularly in the technology sector, as investors engaged in some profit-taking ahead of the year-end.

The recent shift in the Federal Reserve’s (Fed) monetary policy outlook has added to the market’s uncertainty. The Fed’s latest projections suggest a slower pace of interest rate cuts in 2025 than previously anticipated, dampening investor expectations for a more significant decline in borrowing costs.

Despite a strong year-to-date performance, with the Dow climbing nearly 21.5%, the index has recently experienced a downturn. All but five Dow components traded lower on Friday, with Nvidia leading the decline. Concerns over potential restrictions on Chinese access to US-manufactured AI chips have weighed on Nvidia’s stock price and the broader tech sector.

The Dow Jones has fallen below its 50-day Exponential Moving Average (EMA) for the second time in recent months, indicating a potential shift in short-term momentum. However, the index remains comfortably above its 200-day EMA, suggesting that the overall uptrend remains intact.