The Dow Jones Industrial Average plunged Wednesday, snapping its longest losing streak in nearly half a century after the Federal Reserve issued a lackluster economic outlook.

Down 1,123 points, or 2.6%, the blue-chip index is now on its 10th straight day of declines, a stretch last seen during Gerald Ford’s presidency from September 20, 1974 to October 4, 1974. was witnessed. According to On CNN. The economic downturn began after the Fed’s policy statement revealed that it expected only two interest rate cuts in 2025.

The central bank expects inflation to remain above target for an extended period of time, dashing hopes for a quick economic recovery, CNN reported. Despite the Dow’s decline, the overall market has shown resilience, with the S&P 500 and Nasdaq Composite consistently at or near their all-time highs.

However, both indexes were down by the end of the day, with the S&P 500 down 3% and the Nasdaq down 3.6%, CNN reported. “The market was overwhelmed by the expected future rate movement,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a statement.

Certain stocks also influenced the trajectory of the Dow. For example, UnitedHealthcare Group suffered a 15% drop this month following the shooting death of UnitedHealthcare CEO Brian Thompson, CNN reported. Despite these challenges, UnitedHealth stock rose 3.3% on Wednesday.

Conversely, Nvidia, which recently joined the Dow, has fallen over the past month, down about 5%, despite rising more than 180% for the year, the outlet said. This decline was a drag on the overall index, but despite the long period of weakness, the Dow Jones Industrial Average remained up 14% for the year, rising more than 5,000 points in 2024.

Earlier today, the US Federal Reserve (Fed) lowered the federal funds rate by 25 basis points, setting a new target range of 4.25% to 4.50% in an effort to stimulate economic growth. The rate adjustment is in line with market expectations for a 95.4% rate cut following a Dec. 11 report from the Bureau of Labor Statistics detailing a modest increase in consumer prices. (Related: ‘Disastrous Burden’: Rose-colored spin on Joe Biden’s economic legacy ignores reality)

The Fed cut interest rates for the third time this year, cutting rates by an even larger 0.5 percentage point in September, followed by a 0.25 percentage point cut in November. The series of cuts follows a period in which interest rates were held at their highest levels since 2001 (5.25%-5.50%) in an effort to curb inflation.

Meanwhile, the U.S. labor market was performing better than expected, with non-farm payrolls increasing by 227,000 in November, but the unemployment rate rose slightly to 4.2%. In the financial sector, the New York Fed reported that household debt increased by 0.8%, or $147 billion, in the third quarter, and mortgage balances reached $12.59 trillion.

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