Dow posts longest losing streak since 1978 as stocks fall ahead of Fed decision

Nvidia (NVDA) stock continued to fall on Tuesday after the stock fell more than 10% from a record November close. Shares of the chip giant fell nearly 3% in early trading before rebounding from their session lows.

The moves echoed a drop in all three major indexes, which have taken a breather as investors debate what could happen to the U.S. economy in 2025.

“This rally, which has been really dramatic since July, is starting to look a little vulnerable,” said James Demmert, chief investment officer at Main Street Research. Yahoo Finance Morning Briefing.

“So, looking ahead to 2025, I think investors should start emotionally preparing for a normal 8% to 12% correction in the markets,” he warned.

Demmert, who said the Federal Reserve is “probably already at the neutral rate” and probably won’t need to cut interest rates much further from here, also referred to the market’s breadth in the new year after the rapid rise in the big technology companies. stocks.

According to Bank of America’s latest fund manager survey, “the Magnificent 7 has long been considered the most crowded trade,” according to 57% of investors surveyed.

“It’s been a Mag 7 market,” Demmert said. “In 2025, we think those stocks will do well, but others will also do well or better” amid more attractive valuations and AI-driven use cases, which are expected to boost earnings.