Traders work at the New York Stock Exchange on Dec. 17, 2024.
NYSE
The S&P 500 ticked down on Wednesday after the Federal Reserve issued a widely expected interest rate cut, but signaled less reductions next year than previously expected.
The broad market index slipped 0.1%, while the Nasdaq Composite lost 0.1%. The Dow Jones ones Industrial Average hovered near the flatline. The 30-stock average posted a nine-day losing streak on Tuesday, its longest since 1978. If the Dow were to fall for a 10th day on Wednesday, it would be its worst losing streak since an 11-day slide in 1974.
The central bank reduced its overnight borrowing rate by 25 basis points to a target range of 4.25% to 4.5%, as expected. However, the Fed indicated it would only cut rates twice in 2025, according to its closely watched “dot plot
Nvidia, which fell into correction territory earlier this week, climbed about 4%. Nvidia entered the Dow last month. Broadcom, the chip stock seeing big inflows this month as investors dumped Nvidia, pulled back more than 3%.
The Dow’s worst funk in 46 years was mostly caused by a rotation out of old economy shares and into technology stocks, a sector that the century-old measure underweights compared to broader market metrics. Despite the streak, the Dow sits roughly 3% from an all-time high. Other measures of the market are holding up this month, with the S&P 500 in the green for December and sitting less than 1% from an all-time high. The Nasdaq is up nearly 5% this month as investors flooded into tech shares, while shunning the Dow.
“We never say ‘we told you so’ because as soon as investors take that posture the market has a way of smacking them down,” said Laffer Tengler Investments CEO Nancy Tengler. “But we will point out we have argued the tech trade, in general, is not over, and that we are in the early innings of a sustainable bull market.”
Investors will also be paying close attention to Fed policymakers’ Summary of Economic Projections and Fed Chair Jerome Powell’s press conference, seeking clues about what might happen in the months ahead. The central bank is widely expected to temper expectations of more rate cuts in the approaching year, particularly as inflation remains stubborn.”
In turn, hawkish commentary on Wednesday could tee up stocks for a selloff. But Mayfield added he was optimistic that volatility around Fed meetings usually doesn’t linger for very long.
Correction: An earlier version of this story misstated Nvidia’s monthly performance.