Dow loses 1100 points after Fed projects fewer rate cuts

The stock market closed with steep losses Wednesday after the Federal Reserve cut interest rates but projected higher borrowing costs and steeper inflation for 2025.

The Dow Jones Industrial Average closed with a loss of 1,123 points, dropping 2.6 percent from the opening bell. Wednesday marked the first 10-day losing streak for the Dow since 1974, according to CNBC.

The S&P 500 index fell by 3 percent, and the Nasdaq composite plunged 4.1 percent on the day.

While the stock market has been in a rut for more than a week, Wall Street's woes deepened Wednesday after the Fed released economic projections that showed signs of slipping progress in the fight against inflation.

Fed officials projected two interest rate cuts in 2025, two fewer than they expected to issue as of September's projections. They also projected inflation to be higher, but stronger economic growth and employment levels than they expected in September.

Fewer interest rate cuts will keep borrowing costs higher for longer in 2025. Lower interest rates tend to spur the stock market, while investors typically recoil at rate hikes or delays in cuts.

Topics

Stocks Plunge as Fed Forecasts Fewer Rate Cuts Next Year

The Federal Reserve cut rates for a third time this year, but investors shuddered at revised forecasts suggesting only two cuts in 2025.
The New York Times - 37m
Stock market plummets after Fed forecasts fewer rate cuts in 2025

The stock market is down sharply today after the Federal Reserve forecast fewer interest rate cuts in 2025 than expected.
CBS News - 1h
Fed Cuts Interest Rates, but Projects Fewer Reductions in 2025

Federal Reserve officials projected just two rate cuts in 2025, and they made it clear that future reductions would hinge on inflation progress.
The New York Times - 1h
Fed cuts by a quarter point, indicates fewer reductions ahead

The Federal Reserve on Wednesday announced its decision on interest rates.
CNBC - 2h
Long-dated Treasury yields end at nearly 7-month highs after Fed projects fewer rate cuts in 2025

Yields on 10- and 30-year U.S. government debt finished at their highest levels since May on Wednesday, after the Federal Reserve pulled back on the number of interest-rate cuts it foresees for ...
MarketWatch - 2h
The Fed sees only two rate cuts in 2025, fewer than previously projected

The so-called dot-plot, which indicates individual members' expectations for rates, showed officials see interest rates falling to 3.9% by the end of 2025.
CNBC - 4h
Fed lowers rates by 0.25 percentage point, but expects fewer cuts

The Federal Reserve on Wednesday moved to lower its benchmark rate by 0.25 percentage points, but said it plans fewer cuts in 2025.
CBS News - 1h
Dow plummets 1,100 points after Fed scales back plans for interest rate cuts

The Fed cut interest rates a quarter of a percentage point on Wednesday.
ABC News - 2h
Economic Data Points to Fed Rate Cut Next Week, and a Cautious 2025

Persistent inflation probably won’t stop a December rate cut, but it could affect the course of monetary policy for the next two years.
Inc. - 5d