Dow Slides While Nasdaq Rallies: Omen Or Rotation?

RIA · Sep 22, 2026

The Dow has lost ground for three weeks running, down nearly 3.5% from its August 28 close, while the Nasdaq 100 is slightly higher over the same period. That performance gap has worried some market pundits, as they say it may be signaling a downturn. While that might be true, we think the performance differential is more likely a rotation as investors adjust their holdings in response to the Fed taking a more hawkish policy by raising rates. The graph below shows that the Dow and Nasdaq were trading similarly until the Fed meeting on September 16th. The divergence we note above largely…