Dow Jones Defies Nvidia’s Slide as Rate Cut Hopes Fuel Rally

Market participants demonstrated remarkable resilience, pushing the Dow Jones Industrial Average higher despite a significant downturn in the artificial intelligence leader, Nvidia. Investors appeared to look past sector-specific troubles in technology, focusing instead on growing expectations for an interest rate reduction in December. This dynamic raises a critical question: is this the beginning of a sustained year-end rally, or merely a temporary uptick before the holiday season?

Economic Data Fuels Optimism

A shift in market sentiment is underway, with fears of an economic recession being steadily replaced by confidence. This change was bolstered by the latest retail sales figures, which showed a modest 0.2 percent increase. The data suggests that consumer spending remains robust without indicating an overheating economy, creating what analysts term a ‘Goldilocks scenario’ that aligns perfectly with the Federal Reserve’s objectives.

This economic backdrop has solidified the market’s conviction that the central bank will implement another rate cut in December. This prospect is drawing capital back into equities, with particular strength observed in cyclical sectors. The bullish mood is further supported by calming signals from the bond market, where the yield on the 10-year U.S. Treasury note has retreated to 4.02 percent.

Sector Rotation Takes Center Stage

In a notable display of market dynamics, a steep decline in the heavyweight Nvidia failed to drag down the broader index. Instead, a substantial sector rotation occurred, with capital flowing out of high-flying technology stocks and into financial and industrial names.

Should investors sell immediately? Or is it worth buying Dow Jones?

Nvidia came under significant pressure, shedding more than 3 percent. The sell-off was triggered by market rumors suggesting that Meta Platforms might begin sourcing its AI chips from Google rather than Nvidia, a move that could challenge Nvidia’s dominance in the data center business. Conversely, Microsoft gained ground, acting as a defensive anchor within the tech sector as it remains unaffected by these specific concerns. Other components like Travelers and Sherwin-Williams also capitalized on the shifting sentiment, posting notable gains.

Technical Breakthrough for the Bulls

From a chart perspective, the bulls have scored a significant victory. The Dow Jones managed to reclaim the psychologically important 46,500-point level, with the index last quoted at 46,753.36.

This move successfully converted a former area of resistance into a new support level. Momentum indicators such as the RSI suggest strong buying pressure without yet signaling extreme overbought conditions. If buyers can maintain the index above 46,800 points through the closing bell, the path toward the 47,000-mark appears open. The sustainability of this advance now hinges on two factors: continued stability in the bond market and the continued isolation of Nvidia’s weakness from the broader market trend.