Dow Jones Industrial Average Falls

Investing.com — The Dow Jones Industrial Average (DJIA) fell for the seventh consecutive session on Friday, marking its longest losing streak since 2020.

The index dropped 86.06 points, or 0.2%, to close at 43,828.06. In contrast, the Nasdaq Composite edged up 0.12% to finish at 19,926.72, while the S&P 500 was nearly flat, closing at 6,051.09.

Over the week, the Dow declined 1.8%, while the S&P 500 lost 0.6%, snapping a three-week winning streak. The Nasdaq, however, managed to post a weekly gain of 0.3%.

Looking ahead to this week, the spotlight will be on the Federal Reserve’s December 17-18 meeting, at which the central bank is widely expected to cut interest rates by a quarter of a percentage point.

With investors viewing this cut as a near given, even more attention will be focused on policymakers' new economic projections released alongside the decision.

> “A rate cut is very likely on Wednesday at 2pm and nearly fully priced by markets that just weeks ago had placed significant probability on the Fed pausing cuts at this meeting,” Citi strategists led by Andrew Hollenhorst said in a note.

> “Now markets expect a pause in January, assuming that Fed officials will be worried disinflation has stalled above target. Chair Powell will want to keep all options open, neither ruling-in nor ruling-out a cut at the next FOMC meeting.”

In addition to the FOMC decision, the data calendar this week is packed too, ahead of the holidays.

Specifically, a new core PCE report is due on Friday, with UBS strategists expecting a 0.15% increase in November, pushing the annual rate to 2.86%.

Other reports set to come out include November retail sales, housing starts and permits, annualized GDP figures for the third quarter, and final December readings from the University of Michigan consumer survey.

Amid these economic updates, investors are also looking ahead to some major earnings reports this week, with Micron (NASDAQ:MU), FedEx (NYSE:FDX), Nike (NYSE:NKE), and Accenture (NYSE:ACN) among the most anticipated.

What Analysts Are Saying About US Stocks

RBC Capital Markets

“We expect the tug of war between mega cap Growth and everything else for equity market leadership to persist in the new year. It’s not surprising to us that mega cap Growth is bouncing back as we head into the new year given better earnings dynamics, and emerging concerns about the interest rate backdrop for stocks and inflation. We continue to believe that a stagflationary environment is one that benefits the old mega cap Growth leadership.”

Bank of America

“The 2nd half of December is typically the 2nd strongest period of the year for US equities, and the S&P has been up 83% of the time in December of Presidential election years. This week’s FOMC (not expected to bring fireworks based on the 76bp SPX implied move) may be the last hurdle before a Santa rally.”

Morgan Stanley (NYSE:MS)

"We see more balanced EPS growth in 2025 for the S&P 500. This should lead to better breadth, something that has been absent over the last 2 years. We expect this broadening to be more prevalent in large cap quality as we're entering a late cycle extension as opposed to a new cycle."