Wall Street Tumbles as Dow Jones Suffers Worst Losing Streak Since 1974
Wall Street’s three major indices closed with steep losses midweek, pressured by the Federal Reserve’s updated projections for rate adjustments in the coming year.
The Dow Jones Industrial Average [[DJIA]] dropped 2.58% to end at 42,326.87, marking its 10th consecutive decline, the worst streak since October 1974. The broader SPX 500 slid 2.95% to 5,872.16, while the tech-heavy Nasdaq fell 3.56% to 19,392.69.
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Although the Fed cut its benchmark rate by 25 basis points to a range of 4.25%-4.50%, as expected, it also revised its 2025 rate cut projections to just two adjustments totaling 50 basis points.
Main Movers
Markets started the session on a positive note, but the reduced expectations for rate cuts weighed heavily on equities, particularly growth and mega-cap stocks. Among the hardest-hit were Nvidia (-1.15%), Apple (-2.14%), Microsoft (-3.77%), and Amazon (-4.60%).
Fed Chair Jerome Powell, in a post-decision conference, emphasized the need for further progress on inflation, stating, “When we consider new rate cuts, we will look for sustained progress on inflation. So far, we’ve seen a lateral movement in 12-month inflation metrics.”
Federal Reserve Policy
The Federal Reserve (Fed) announced its third consecutive rate cut on Wednesday, reducing its benchmark interest rate by 0.25% to a range of 4.25%-4.50%, in line with market expectations.
In its updated macroeconomic projections, the Fed indicated that it now anticipates only two more rate cuts of 0.25% each in 2025, fewer than the four cuts previously forecasted.
Additionally, the Fed raised its inflation forecast for next year, increasing its projection from 2.1% to 2.5%. The central bank now expects the 2% inflation target to be reached only by the end of 2026.
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