US Stock Futures Stabilised on Thursday After a Sharp Selloff
London, 19 December 2024
Following a steep selloff on Wall Street the day before, which was brought on by the Federal Reserve's updated outlook for interest rates in 2025, US stock futures stabilised on Thursday.
The Dow fell 1,123.03 points, or 2.58%, during Wednesday's regular trading session, continuing its 10-day losing run, which is the longest since 1974. The Nasdaq Composite and S&P 500 both had significant declines, dropping 2.95% and 3.56%, respectively. The Fed's decision to carry out a widely anticipated quarter-point rate decrease and the announcement that the central bank intends to reduce rates less frequently than previously thought caused the decline.
In September, the Fed predicted four rate decreases in 2025; now, it only anticipates two. In addition, the Fed increased projections for core inflation and economic growth while decreasing its forecast for the unemployment rate, which caused Treasury yields to rise. Additionally, overly optimistic mood and stretched positions made the market susceptible to a selloff. (Source: Trading Economics)
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