Wall Street’s Blue-Chip Index Extends Decline Amid Sector Rotation

The Dow Jones Industrial Average extended its recent losing streak on Wednesday, marking a fourth consecutive session of declines. The downward move came despite a briefly positive opening, as investors executed a pronounced shift away from technology stocks toward more defensive sectors. The caution appears directly linked to the impending release of key U.S. inflation data.

A clear sector rotation defined the session. Investors moved capital out of cyclical technology and industrial names, seeking shelter in traditional defensive plays. Gains were led by Chevron, which advanced 1.84% alongside rising oil prices. Consumer staples giant Procter & Gamble rose 1.72%, while McDonald's shares climbed 1.33%—both classic performers during periods of market uncertainty.

On the downside, economically sensitive stocks faced significant pressure. Caterpillar plunged 4.72% amid growing concerns over global industrial demand. Nike declined 2.09%, and Apple shed nearly one percent. Overall trading volume remained below average, signaling investor hesitation ahead of Thursday's Consumer Price Index report.

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

Technical Picture Weakens

During the trading day, the index tested support near the 47,850-point level. A sustained break below this threshold could pave the way for a test of the 50-day moving average, currently situated around 47,200 points. Resistance now holds firm in the 48,200-point zone. The Relative Strength Index (RSI) has cooled to neutral territory, following a period where the Dow was trading in overbought conditions.

The yield on the benchmark 10-year U.S. Treasury note held steady at 4.15%. Market participants are awaiting clues from the inflation data regarding the future interest rate path of the Federal Reserve. The tech-heavy Nasdaq Composite suffered more acutely from the sector sell-off, finishing the day with a loss of 1.8%.