Stocks plunge following Fed inflation projections

[mahatmakanejeeves]

Source: NBC News

MARKETS
Stocks plunge following Fed inflation projections
The Dow fell more than 1,100 points as it headed for its worst losing streak since 1974.


— Traders work on the floor of the New York Stock Exchange in New York City on Dec. 18.Michael Nagle / Bloomberg via Getty Images

Dec. 18, 2024, 4:29 PM EST
By Rob Wile

Major stock indices plunged Wednesday after the Federal Reserve signaled a slower pace of interest rate cuts for 2025 than previously forecast, renewing concerns about how fast inflation would fall.

The S&P 500 lost 2.4% and the Nasdaq Composite shed nearly 3%, with losses intensifying as markets closed for the day.

The Dow Jones Industrial Average tumbled more than 1,100 points for its biggest loss since August. The Dow's 10th-consecutive day of decline is now closer to becoming the worst losing streak in 50 years. Though eye-popping, the streak largely reflects a rotation by investors out of more established companies into tech stocks, to which the Dow tends to apply less weight.

The Fed indicated it now sees just two reductions to its key federal funds rate next year, after projecting four a few months ago. It comes as the central bank now believes inflation will continue to remain above its 2% target into 2026. … In other words, the Fed is signaling that interest rates will have to remain higher for longer to keep a lid on the pace of price increases.

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Read more: https://www.nbcnews.com/news/amp/rcna184755

[IronLionZion]

1. 2025 might be painful

investors are preparing for the Trump economy

[bucolic_frolic]

2. Trumpflation '25

Then again if they close the government, the populace is terrified and stops spending, it's difficult to see where the demand comes from. PANIC would produce supply chain shortages and stockouts even as food backs up because government paychecks and SS checks stall or fall.

We were always told in International Finance that if you think inflation is scary, try deflation. Debts unpaid, defaults, bankruptcies.

[IronLionZion]

3. The MAGA types accept your challenge

they want to try deflation. F around and find out.

[LT Barclay]

5. I'm no economist, but life experience tells me your scenario is far more likely given the promises Trump has made

Even if he doesn't fulfill them or even initiates them, there will be enough instability and chaos to burst some economic bubbles. We just finished a move and bought a house, and with that recent experience, I think the housing market will be the first to crash. That will put a lot of people out of work.

[SWBTATTReg]

4. Funny and hilarious...tRUMP hasn't even started yet, and yet the Markets are crashing / or going down.

To be fair, they have been going up and up for the longest time. Perhaps the Markets themselves are telling everyone 'Hey, it's time to cool things off a little bit'...and w/ tRUMP already causing waves w/ his garbage talk, why not go down, the markets?

I just hope that all have taken some of their earnings and ran...

[nmmi]

6. From the December 4 peak before the Dow's 10-day fall began: Dow down 6.0% and S&P 500 down 3.5%

DOW:
Dec 4: 45,014.04
Dec 18: 42,326.87
-5.97%

S&P 500:
Dec 4: 6,086.49
Dec 18: 5,872.16
-3.52%
(It all-time-peaked 12/6 at 6090.27, slightly higher than Dec 4 level. )

DOW: https://finance.yahoo.com/quote/%5EDJI/history/
S&P 500: https://finance.yahoo.com/quote/%5EGSPC/history/

The S&P 500 is far far more representative of the total U.S. stock market than the 30 cherry-picked price-weighted stocks of the DOW. The S&P 500 isn't even in pull-back territory (which begins at 5% down). Nor is it even in correction territory (which begins at 10% down). Bear markets begin at 20% down.

Year to Date, as of the December 18 close, the DOW is up 12.3%, and the S&P 500 up 23.1%. Plus dividends.

[ZonkerHarris]

7. Under Trump you can't take it with you and you can't have it now.