On Wednesday, December 18, American markets closed sharply lower, with the Dow falling more than 1,100 points, its steepest decline since August, and its longest losing streak since 1974. The Fed carried out a reduction in rate of 25 basis points as expected, but reported fewer cuts in 2025. Markets reacted sharply to the less dovish tone, despite assurances about the strength of the economy and progress being made against inflation.
Fed Chairman Powell struck a hawkish tone, the Fed cut rates by 0.25%, but reduced its 2025 rate cut forecast to two, down from four in September, and below market expectations.
The U.S. current account deficit widened to $310.9 billion in the third quarter, surpassing the estimated $284 billion. Housing starts fell 1.8% in November to an annualized rate of 1.289 million units, compared to 1.312 million in October.
The S&P 500 Index ended in the red, with consumer discretionary, real estate and communications services stocks suffering the biggest declines.
The Dow Jones fell 2.58% to close at 42,326.87, the S&P 500 fell 2.95% to 5872.16 and the Nasdaq Composite fell 3.56% to end at 19392.69.
Asian markets today
- On Thursday, Japan’s Nikkei 225 lost 0.80% and closed the session at 38,808.50, dragged down by losses in the communications, steel and transportation equipment sectors.
- Australia’s S&P/ASX 200 index lost 1.70% and closed the day at 8,168.20, led by losses in the gold, IT and materials sectors.
- India’s Nifty 50 index fell 0.98% to 23,961.95, and the Nifty 500 lost 0.77% to end at 22,757.65, hit by losses in banking, property durable consumption and capital goods.
- China’s Shanghai Composite fell 0.36% to close at 3,370.03, while the Shenzhen CSI 300 gained 0.09% to end the day at 3,945.46.
- Hong Kong’s Hang Seng Index fell 0.56% and closed the session at 19,752.51.
Eurozone at 5:30 am EST
- The European STOXX 50 index fell 1.60%.
- Germany’s DAX lost 1.12%.
- France’s CAC fell by 1.49%.
- The British FTSE 100 index lost 1.27%.
- European stocks fell as the Fed signaled slower rate cuts in 2025. Rate-sensitive technology stocks were hit hardest, while bond yields soared and commodities fell.
Commodities at 5:30 a.m. EST
- WTI crude oil traded 0.71% lower at $70.08 per barrel, and Brent crude rose 0.07% to $73.44 per barrel.
- Natural gas rose 2/16% to $3.447.
- Gold fell 0.78% to $2,632.79, silver fell 2.23% to $30.027 and copper fell 1.62% to $4.0903.
U.S. index futures at 5:30 a.m. EST
Dow Jones futures rose 0.40%, S&P 500 futures gained 0.48% and Nasdaq 100 futures rose 0.47%.
Forex à 5 h 30 HNE
- The U.S. dollar index lost 0.13% to 107.89, USD/JPY rose 1.35% to 156.89, and USD/AUD fell. by 0.42% to 1.6012.
- The US dollar rose to a two-year high after the Fed signaled fewer rate cuts in 2025, putting pressure on global currencies. However, it fell on Thursday amid weak trading activities due to the holiday period, with the euro and the Canadian dollar, the South Korean won fluctuated sharply.
Photo via Shutterstock
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