Traders work on the floor of the New York Stock Exchange in New York City.
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The Dow Jones Industrial Average was higher Thursday, rebounding from its 10th straight loss.
The 30-stock Dow added 138 points, or 0.3%. The S&P 500 gained 0.2%, alongside the Nasdaq Composite.
Shares of artificial intelligence darling Nvidia, which weighed down the Dow in the previous session, traded 2% higher. Gains in financial stocks, including JPMorgan Chase and Bank of America, led the recovery in equities Thursday alongside industrials, health care and utilities.
Stocks plunged Wednesday after the Federal Reserve struck a heavy blow against the roaring bull market, signaling that it was likely to cut interest rates only twice next year, down from the four reductions that had been penciled in during its last forecast, in September. The central bank also trimmed its benchmark overnight borrowing rate a quarter percentage point Wednesday, to a target range of 4.25% to 4.5%, but the question now is what policymakers will do in 2025.
“I think that this correction could last a bit,” Paul Meeks, Harvest Portfolio Management’s co-chief investment officer, told CNBC’s “Squawk Box” on Thursday. “You’ve seen the marquee name Nvidia come down, so what I would expect people to do [and] what I would recommend people to do is to maybe keep some powder dry.”
Volatility took a step down Thursday, with the Cboe Volatility Index pulling back more than 16% to roughly 23. Wall Street’s so-called “fear gauge” soared Wednesday to as high as 28.27, reflecting heightened investor uncertainty over the path of interest rates.
Fed Chair Jerome Powell didn’t offer investors much in the way of immediate comfort Wednesday following the Fed meeting. “We’re at 4.3% — that’s meaningfully restrictive, and I think it’s a well-calibrated rate for us to continue to make progress on inflation while keeping a strong labor market,” Powell said at a press conference, noting that cutting rates in recent months has allowed the central bank to “be more cautious as we consider more adjustments to our policy rate.”
Leading up to Wednesday’s rate move, Wall Street was betting on the Fed to stay more aggressive in lowering borrowing costs, which affect everything from what companies pay to raise capital to how much it costs consumers to buy a new house or car.
But with the revamped Fed outlook, the Dow Jones Industrial Average slid 1,123.03 points, or 2.58%, to 42,326.87 — posting its longest losing streak since 1974, and putting the index on track for its worst weekly performance since March 2023. The S&P 500 tumbled 2.95%, and the Nasdaq Composite lost 3.56%.
The 10-year Treasury yield rose to 4.566% on Thursday after climbing more than 13 basis points to cross 4.50% after the last Fed meeting of the year Wednesday.
