Wall Street has been seesawing for quite some time now due to rising artificial intelligence (AI) concerns. SPDR Dow Jones Industrial Average ETF Trust DIA has lost about 2% over the past month (as of Nov. 21, 2025) versus a 2.7% decline in the SPDR S&P 500 ETF Trust SPY and a 4.4% slump in the Nasdaq-100-based Invesco QQQ Trust, Series 1 QQQ.
Further Policy Easing in the Cards?
New York Federal Reserve President John Williams signaled the possibility of another interest-rate cut later this year. In a speech delivered in Santiago, Chile, Williams said monetary policy remains “modestly restrictive,” though less so after recent rate cuts, as quoted on CNBC.
He added that there is still room for a near-term move toward a more neutral stance. No wonder, traders increased their bets on another quarter-point cut, with Fed funds futures pricing in about a 75% probability on Nov. 24, 2025 (at the time of writing), up sharply from 42.4% a week earlier, according to the CME FedWatch tool.
Investors should note that the Fed has cut rates twice so far this year, with the easing action beginning in September. Lower borrowing costs could spur consumer spending and boost consumer-focused companies that have strong placements in the Dow Jones index.
Why Dow Jones May Be Better-Positioned Than Nasdaq?
Artificial intelligence-related stocks continued their volatile run in recent times. The AI space, in any case, has been under pressure in recent times due to bubble concerns. Analysts are divided in their opinions about AI overvaluation, as mentioned on a CNBC article.
Since the Nasdaq is tech-heavy followed by the S&P 500, and the Dow Jones has lesser tech exposure, AI valuations are likely to bother the Dow Jones to a lesser extent. Information technology takes about 20% of the portfolio, while the S&P 500 takes about 35% of the fund, and the Nasdaq-100 comprises about 65% of the portfolio.
Healthcare Sector Gaining Prominence
The healthcare sector has received a boost lately as investors have rotated to non-cyclical and lower-valuation sectors for diversification from the tech space. Note that Health Care Select Sector SPDR Fund XLV gas gained about 2.2% over the past month (as of Nov. 21, 2025). The healthcare sector has about 13% exposure to the fund DIA.
Financials Flexing Muscles
The Dow Jones’ potential rally could be backed by strength in the banking and financial stocks. Note that State Street SPDR S&P Bank ETF KBE has lost about 0.2% over the past month (as of Nov. 21, 2025). Further rate cuts may steepen the yield curve and boost banking stocks. Financial stocks command about 27.28% of the Dow Jones.
Will the Dow Jones Rally Last?
The stock market’s recent revival has been aided by optimism around the shutdown resolution. However, along with many analysts, we also believe that the continuation of the rally will depend on upcoming economic data points. Investors will soon refocus on fundamentals.
Bottom Line
So, overall, the Dow Jones’ performance should be good in the near term, if not great. Its limited focus on tech stocks may now favor the index. Investors can keep a close tab on the DIA ETF. However, if the Fed continues to cut rates ahead, the Nasdaq may again flex its muscles, subsiding all AI bubble fears and top the Dow Jones.
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Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports Health Care Select Sector SPDR ETF (XLV): ETF Research Reports State Street SPDR S&P Bank ETF (KBE): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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