Topline
The blue chip Dow Jones Industrial Average is on the brink of its lengthiest stretch of declines since 1974, a rut marked Wednesday by a sharp broader selloff tied to a hawkish update from the Federal Reserve regarding further interest rate cuts.
A trader works on the New York Stock Exchange floor on Wednesday.
Key Facts
The Dow tumbled more than 900 points, or more than 2%, by late afternoon, reversing what was a 150-point gain prior to the Fed’s 2 p.m. announcement it agreed to lower interest rates by 25 basis points as expected but it forecasts just two more 25 basis-point cuts in 2025, a decrease from the four projected last quarter.
If the losses hold, it will be the Dow’s 11th-straight trading session in the red, the longest losing streak since 1974.
And Wednesday is on track to be the Dow’s steepest point drop since September 2022.
The selloff extended across financial markets as investors reacted sourly to the prospect of more restrictive monetary policy, which weighs on corporate profit margins as borrowing costs grow pricier.
The S&P 500 and tech-heavy Nasdaq stock indexes declined 2.7% and 3.6%, respectively, while yields for 10-year U.S. government bonds rose 10 basis points to 4.5%, on track for the highest end-of-day level since July.
Higher yields indicate declining value in bonds and signify investor expectations of higher Fed rates for longer.
Surprising Fact
Wednesday is on pace to be the Dow’s and S&P’s steepest percentage drop since Aug. 5 and the Nasdaq’s worst day since Sept. 2022.
Tangent
The Dow’s top-performing stocks Wednesday was Nvidia and UnitedHealth Group, the worst-performing stocks during the first 10 days of the losing streak.
Big Number
2,500 points. That’s how much the Dow is down during its down stretch dating back to Dec. 5.
Chief Critic
“Markets should be happy that the Fed is taking a measured approach to normalizing interest rates,” Jamie Cox, managing partner at Harris Financial Group, wrote in emailed comments, noting the need for inflation to “cooperate lower” for the Fed to get more aggressive.
Further Reading
