NEW YORK (Reuters) – The New York Stock Exchange ended sharply lower on Wednesday, seeing initial gains erased after the press release from the American Federal Reserve (Fed), which proceeded as expected with an additional rate cut but indicated that the pace of its monetary easing would slow next year.
The Dow Jones index lost 2.58%, or 1,123.03 points, to 42,326.87 points.
The broader S&P-500 lost 178.45 points, or 2.95%, to 5,872.16 points.
The Nasdaq Composite fell 716.37 points (3.56%) to 19,392.69 points.
Wall Street’s three main indices suffered their worst daily fall in several months – August 5 for the Dow Jones and the S&P-500, July 24 for the Nasdaq.
At the end of its two-day meeting, the Fed cut interest rates by 25 basis points as expected, making its third consecutive reduction in borrowing costs.
The US central bank also released its quarterly economic projections report, in which it said it would only cut rates by a total of 50 basis points over the whole of 2025, citing the strength of the bond market. work and the persistence of inflation.
“Looking at the changes to economic forecasts, (the Fed) really had no choice,” said Ellen Hazen, chief market strategist at FLPutnam Investment Management in Massachusetts.
“It’s very clear that the economy is doing much better than in (the Fed’s) prior forecasts. And that must have contributed to its desire to potentially pause” monetary policy easing, he said. she added.
The Dow Jones recorded its tenth consecutive session of decline, its worst series since October 1974 (eleven sessions of decline in a row). However, it remains up more than 12% over the year.
For their part, the S&P-500 and the Nasdaq have gained around 23% and nearly 29% respectively this year, driven largely by technology giants and the enthusiasm around artificial intelligence (AI) in a context lower interest rates and, more recently, hope for pro-growth policies that US President-elect Donald Trump could implement. However, investors fear at the same time that certain measures promised by Donald Trump, who will take office on January 20 at the White House, could fuel inflation – notably vast customs duties.
The CBOE Volatility Index, considered a gauge of the level of fear on Wall Street, jumped more than eleven points on Wednesday to 27.62, a four-month high.
In the wake of the Fed’s press release, bond yields rose, with the ten-year US Treasury bill reaching a record since May 31, at 4.518%.
All major sectors of the S&P-500 ended the session in the red, with real estate notably recording a decline of 4%, one of the largest of the day.
text_section_type=”notes” For further information, please click on the following codes: NYSE Nasdaq Market Summary……….. 25 Highest Volumes……….. ……. Largest increases in %…………… Largest declines in %…………… Index guide American stock exchanges…. Market statistics…………………… 10-year benchmark bond………… .Guide to US Sector Indices…Guide to US Stock Markets……Dow Jones Indices…………………….. Indices S&P………… Ex-dividend values……………………… Forecasts for the Dow Jones and the S&P..
(Written by Jean Terzian)
by Chuck Mikolajczak
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