Traders work on the floor of the New York Stock Exchange (NYSE) in New York City.
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Stock futures were little changed Wednesday night as investors came to terms with a new, sobering reality in financial markets. Trading was volatile during the regular session as panic swirled around the Federal Reserve’s revision of its interest rate outlook for next year.
Futures linked to the Dow Jones Industrial Average An increase of 26 percentage points, or less than 0.1%. S&P Futures Traded slightly above flat, while Nasdaq 100 Futures Shedding 0.1%.
stock plunge on wednesday The Federal Reserve dealt a heavy blow to the strong bull market by suggesting it may only cut interest rates twice next year, down from the four cuts it last predicted in September. The central bank also cut its benchmark overnight borrowing rate by a quarter of a percentage point on Wednesday to a target range of 4.25% to 4.5%, but the question now is what policymakers will do in 2025.
Jeff Buchbinder, chief equity strategist at LPL Financial, said in response to Wednesday’s plunge that “tight positioning and market sentiment have left stocks vulnerable to sell-offs.” “The sharp rise in inflation expectations and the related sell-off in bonds is a convenient excuse. Once technology’s Support disappeared and no other group could step in to fill the gap.”
Chairman Powell didn’t bring much immediate comfort to investors. “We’re at 4.3%, which is a meaningful limit and I think it’s a well-calibrated rate that allows us to continue to make gains on inflation,” Powell said at a news conference after the Fed meeting. progress while maintaining a strong labor market.
Ahead of Wednesday’s rate change, Wall Street is betting the Fed will remain more aggressive in lowering borrowing costs, which affects everything from how much it costs companies to raise capital to the cost for consumers to buy a new home or car.
But as the Fed’s outlook adjusts, Dow Jones Industrial Average It fell 1,123.03 points, or 2.58%, to 42,326.87, marking its 10th straight day of losses, its longest losing streak since 1974 and putting the index on track for its worst weekly performance since March 2023. S&P 500 Index Down 2.95% to 5,872.16 Nasdaq Index The technology index fell 3.56% to 19,392.69 points as the technology index expanded its losses near the end of the trading session. The Dow Jones Industrial Average and 30 S&P 500 stocks all posted their biggest one-day losses since August, when the unwinding of yen carry trades rocked the market.
The Federal Reserve’s cautious outlook caused U.S. Treasury yields to rise sharply, further weighing on stocks. The 10-year Treasury yield rose more than 13 basis points to 4.50%.
The Chicago Board Options Exchange Volatility Index, known as Wall Street’s “fear gauge,” also surged, indicating increased investor uncertainty about the direction of interest rates.
In after-hours trading, Micron Technology Chipmaker shares plunge about 13% Reported guidance weaker than expected Season 2.
