Dow’s rare nine-day decline trails 267 one-day crashes since 1900: Is a technological shift to blame? – Intel (NASDAQ: INTC), SPDR Dow Jones Industrial Average ETF (ARCA: DIA)

The Dow Jones Industrial Average fell for a ninth straight day on Tuesday, part of one of its longest downtrends in decades.

What happened: The last time the index posted such a continuous decline was in February 1978, according to FactSet data. However, the index’s single-day plunge was steeper than the accumulated erosion over the past nine days.

Since December 4 (when it was 45,014.04), the Dow has fallen nearly 3.47% over the past nine days to 43,449.90.

According to a post by X, chief market strategist at Carson Research, Ryan Detrick“, “Since 1900, I’ve seen it drop more than 3.47% in a single day 267 times.

See also: Nvidia technical analysis warns as NVDA stock falls below key moving averages, but analysts still see 18.11% upside: More to come

Why the Dow fell: The Dow Jones Industrial Average is a price-weighted index based on 30 U.S. stocks, originally an index of 12 industrial stocks. The index has been criticized for its limited scope, particularly its underrepresentation of technology stocks, which have shown substantial growth in recent years.

NVIDIA Corporation NVDA Moved to Dow Jones Index, replacing Intel Corporation international trade center November 4th this year. Nvidia has split its stock twice in the past four years, most recently a 10-for-1 stock swap that took effect in June, making it easier for the Dow Jones to include the stock in its indexes.

That’s because the Dow’s price-weighting method is troublesome for technology companies that don’t do stock splits and trade above $1,000.

A given percentage change in the price of a higher-priced stock will have a greater impact on the value of a price-weighted index than the same percentage change in the price of a lower-priced stock. In other words, stocks with higher prices have greater weight in the calculation of a price-weighted index.

Therefore, investors’ recent preference for technology stocks may also be a reason for the Dow’s decline.

“The Dow has not reflected its original intent for decades. It is not a true reflection of American industrialization.” Mitchell GoldbergPresident of ClientFirst Strategies said in a LinkedIn post. “Its losing streak is more a reflection of how investors are buying into tech stocks.”

See Also: As Nvidia overtakes Intel in the S&P Dow Jones Indices, here’s how the two stocks have performed over the past year

Price Action: The Dow has gained 15.21% so far this year, 11.88% over the past six months, and only 0.14% last month.

exchange-traded funds that track the index, SPDR Dow Jones Industrial Index ETF Trust DIA It has grown 15.51% year-to-date, 11.93% over the past six months, and only 0.32% last month.

The streak of losses comes as investors await the Federal Reserve’s interest rate decision on Wednesday. Although a 25 basis point rate cut is widely expected, market participants are cautious about the Fed’s potential signal that the pace of future rate cuts will slow in 2025.

However, despite the recent downturn, the blue-chip index is still 1,500 points, or 3.5% higher than on Election Day.

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