US stocks plunged Wednesday as recession fears dampened investors’ enthusiasm for Fed rate cuts.
The Dow Jones Industrial Average snapped its nine-day winning streak.
Wall Street strategists have warned Fed rate cuts could be a double-edged sword for stocks.
US stocks plunged on Wednesday as investors weighed the odds of recession and reined in their enthusiasm for expected rate cuts.
The Dow Jones Industrial Average snapped its nine-day winning streak, which saw a series of fresh record highs.
Investors have been riding a strong rally on expectations of Fed rate cuts next year. But Wall Street strategists have warned rate cuts could be a double-edged sword. While lower rates are bullish for stocks, they can also signal a slowing economy that may tip into recession.
GDP is expected to rise 2.7% this quarter, according to the Atlanta Fed’s GDPNow model, down from the third quarter’s 5.2% surge. Shares of FedEx, a bellwether for worldwide economic trade, tumbled after reporting grim results.
Investors are also keeping a close watch on the Personal Consumption Expenditures price index on Friday, which is the Fed’s preferred inflation measure.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Wednesday:
Here’s what else happened today:
In commodities, bonds, and crypto:
West Texas Intermediate crude oil slipped 0.15% to $73.83 a barrel. Brent crude, the international benchmark, dipped 0.58% to $79.24 a barrel.
Gold ticked lower 0.41% to $2,032.01 per ounce.
The 10-year Treasury yield fell five basis points to 3.864%.
Bitcoin rose 2.88% to $43,570.
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