Stock market news for Dec. 18, 2024

The Dow Jones Industrial Common sank deeper into the historical past books on Wednesday, with the index posting its tenth straight dropping day as a disappointing price outlook by the Federal Reserve rocked the inventory market.

The Dow misplaced 1,123.03 factors, or 2.58%, to 42,326.87, for its worst dropping streak since an 11-day slide in 1974. The Wednesday decline was its worst since August and solely the second time it misplaced 1,000 factors this 12 months in a single session. The S&P 500 misplaced 2.95% to five,872.16 and the Nasdaq Composite shed 3.56% to 19,392.69 with losses intensifying into the shut of buying and selling.

The central financial institution diminished its in a single day borrowing price by 1 / 4 level to a goal vary of 4.25% to 4.5%, as anticipated. Nevertheless, the Fed indicated Wednesday afternoon it could solely lower charges twice in 2025, fewer than the 4 cuts given in its final forecast. Fed Chair Jerome Powell stated the central financial institution’s transfer to chop charges in latest months permits it to “be extra cautious as we take into account extra changes to our coverage price.”

Earlier than Wednesday, merchants had been hoping the Fed would keep aggressive with price cuts in 2025, fueling the bull market additional. Treasury yields jumped following the Fed’s cautious outlook, pressuring share costs. The ten-year Treasury yield crossed above 4.50%.

“Threat belongings and a really extremely valued inventory market does not like the concept price cuts are much less probably on each side of the mandate,” DoubleLine Capital CEO Jeffrey Gundlach stated on CNBC’s “Closing Bell.” “The takeaway that I bought from that press convention was there’s not going to be an aggressive chopping cycle … and the market is just about in sync with that.”

The Dow’s dropping streak started the session after it closed above 45,000 for the primary time ever on Dec. 4. The overall losses for the Dow throughout its dropping streak have totaled 6%.

“Goodbye punch bowl. No Christmas cheer from the Fed. Policymakers see increased inflation and decrease unemployment in 2024. There’s merely no cause to be dovish provided that outlook,” stated David Russell, world head of market technique at TradeStation. “The simple lifting is completed now that charges are now not clearly restrictive. It is a logical time to pause.”

Earlier than it intensified on Wednesday, the Dow’s worst funk in a long time was largely attributable to a rotation out of previous financial system shares and into know-how shares, a sector that the century-old measure underweights in comparison with broader market metrics.

However the entire market was rocked on Wednesday. The S&P 500’s loss was additionally its worst since August and lower its 2024 acquire to 23%.