MARKET WRAP

Stocks sank today after the Federal Reserve cut interest rates but indicated fewer rate cuts for 2025 than previously forecasted, disappointing traders who had hoped for more aggressive cuts to fuel the bull market. The S&P 500 fell 2.95%, the Nasdaq Composite fell 3.56%, the Russell 2000 sank 4.80%, and the Dow dropped 1,123 points. This marks the Dow’s 10th straight day of losses and its worst losing streak since 1974.

The S&P and Dow posted their worst trading session since August. The Russell 2000 saw its worst day since June 2020.

All 11 sectors closed the day lower, with Consumer discretionary losing more than 4%, while Real Estate, Technology, and Financials were down around 3%.

The cautious stance from the Fed led to a jump in Treasury yields, with the 10-year yield crossing above 4.50%, putting pressure on stock prices. The Dow's losing streak, which began after reaching a record high above 45,000 on December 4, has resulted in a total loss of 5.6%. According to CNBC, experts attribute this downturn to the Fed's less dovish approach and a rotation out of old economy shares into technology stocks, a sector underrepresented in the Dow.

MRKT MATRIX: December 18, 2024

Today’s Top Stories:

• Dow tanks by 1,100 points, posts first 10-day losing streak since 1974 (CNBC)

• Fed Lowers Rates by Quarter Point, Signals Two Cuts for 2025 (Bloomberg)

• 2024 Has Been a Year of Extremes in the Stock Market. Can It Last? (WSJ)

• Nearly all the preconditions for a market bubble are met, says UBS. How to hedge (CNBC)

• Walmart Cements Retail Dominance With Best Year Since 1998 (Bloomberg)

• Merck to develop weight loss pill from Chinese drugmaker in up to $2 billion licensing deal (CNBC)

• Microsoft acquires twice as many Nvidia AI chips as tech rivals (Financial Times)

• Google Is Pushing Quantum Computing Closer to Reality (Bloomberg)

• Trump Tariff Risk Casts Doubt on IPO Blowout Forecast for 2025 (Bloomberg)

• U.S. Weighs Ban on Chinese-Made Router in Millions of American Homes (WSJ)

• Japan’s Honda and Nissan to reportedly begin merger talks (CNBC)

Today’s MRKT Call is Presented by SoFi

Decision Day For The Fed: Where Do Markets Go From Here?

Dan Nathan and Liz Young Thomas break down the top market headlines and bring you stock market trade ideas for Wednesday, December 18th.

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