Stocks closed sharply lower on Wednesday after the Federal Reserve cut interest rates but expected higher borrowing costs and higher inflation in 2025. .
The Dow Jones Industrial Average fell 2.6% from the opening bell, closing down 1,123 points. According to CNBC, Wednesday marked the first time the Dow had a 10-day losing streak since 1974.
On this day, the S&P 500 Index fell 3%, and the Nasdaq Composite Index fell 4.1%.
Stock markets have been stagnant for more than a week, but Wall Street's woes deepened Wednesday after the Federal Reserve released economic forecasts that showed signs of slowing progress on combating inflation.
Fed officials expect two rate cuts in 2025, two fewer than they expected in September. It also predicted that economic growth and employment levels would remain strong, although inflation would be higher than expected in September.
If interest rates are cut less often, borrowing costs will rise for a long time in 2025. Lower interest rates tend to stimulate stock markets, but investors typically balk at rate increases or delays in rate cuts.
