Traders Work on the Floor of the New York Stock Exchange as Dow Jones Industrial Average Snaps Longest Losing Streak
The Dow Jones Industrial Average narrowly snapped its longest losing streak since 1974 on Thursday, adding 15.37 points, or 0.04%, to close at 42,342.24. Despite initially rebounding to start the session, major averages shed their gains as the day went on, resulting in a weak close. Seven out of 11 sectors of the S&P 500 ended the day lower.
The 10-year Treasury yield also rose for a second day, topping 4.5% and adding pressure to stocks. The benchmark yield surged more than 13 points in the previous session, leading to a sharp drop in the major averages.
The Federal Reserve’s decision to signal only two interest rate cuts next year, down from four, and trimming its benchmark overnight borrowing rate by a quarter percentage point, to a target range of 4.25% to 4.5%, led to the decline. The question now is what policymakers will do in 2025.
Paul Meeks, co-chief investment officer at Harvest Portfolio Management, predicted that the correction could last and recommended investors keep some powder dry. The Cboe Volatility Index pulled back nearly 13% to around 24, reflecting a decrease in volatility.
Fed Chair Jerome Powell did not offer investors much comfort following the Fed meeting, stating that the current interest rate is well-calibrated and suitable for making progress on inflation while maintaining a strong labor market. The move comes after Wall Street was betting on the Fed to stay more aggressive in lowering borrowing costs.