Traders at work at the New York Stock Exchange on December 17, 2024.
new york stock exchange
Stock futures rebounded Thursday after the Dow Jones Industrial Average fell 1,100 points, falling for the 10th straight year, after the Federal Reserve revised its outlook for next year's interest rates. did.
Futures linked to the Dow Jones Industrial Average It was 260 points, or 0.6% higher. S&P futures 0.7% increase, Nasdaq 100 futures.
Stocks on Wednesday after the U.S. Federal Reserve indicated it was likely to cut interest rates only twice, down from four rate cuts in its previous forecast for next September. fell sharply. The central bank also cut its benchmark overnight borrowing rate by a quarter of a point on Wednesday to a target range of 4.25% to 4.5%, but the question now is what policymakers will do in 2025.
Jeff Buchbinder, chief equity strategist at LPL Financial, said after Wednesday's weakness that “tough positioning and sentiment leaves stocks vulnerable to declines.” “The huge rise in inflation expectations and the associated decline in bonds was a convenient excuse. Once support from technology companies evaporated, other groups were unable to step in to fill the gaping hole.”
Chairman Jerome Powell offered little immediate reassurance to investors. “Our level is 4.3%, which is a meaningful limit and an appropriately calibrated limit to keep inflation moving forward while maintaining a strong labor market,” Powell said at a press conference after the Fed meeting. I think it's the interest rate,” he said. Rate cuts in recent months have allowed the central bank to be “more cautious as it considers further adjustments to policy rates.”
Ahead of Wednesday's rate hike, Wall Street was betting that the Fed would remain more aggressive in lowering borrowing costs. Borrowing costs affect everything from how much businesses pay for financing to how much it costs consumers to buy a new home or car.
However, with the Fed's revised outlook, the Dow Jones Industrial Average fell 1,123.03 points, or 2.58%, to 42,326.87, snapping its longest losing streak since 1974 and the index's worst weekly performance since March 2023. We are on track to become. The S&P 500 plummeted. The Nasdaq Composite fell by 2.95%, with the tech-heavy index widening its losses toward the close, to 3.56%. The Dow Jones Industrial Average and S&P 500 both posted their biggest single-day losses since August, when an unwinding of yen carry trades rocked the market.
U.S. Treasury yields soared on the Fed's cautious outlook, further weighing on stock prices. The 10-year Treasury yield rose more than 13 basis points to more than 4.50%. It rose further early Thursday morning.
The CBOE Volatility Index, known as Wall Street's “fear gauge,” also jumped, signaling heightened investor uncertainty over the direction of interest rates.
In early Thursday trading, micron technology Shares plunged 14% after the chipmaker reported lower-than-expected results for the second quarter.
