Dow poised for first 10-day losing streak since 1974 after Fed signals fewer rate cuts: Live updates

The Dow Jones Industrial Average sank deeper into the history books on Wednesday, with the storied index on track for its 10th straight losing day following a disappointing rate outlook by the Federal Reserve.

The Dow lost 261 points, or 0.5%, on track for its worst losing streak since an 11-day slide in 1974. The 30-stock average posted a nine-day losing streak on Tuesday, its longest since 1978. The S&P 500 lost 0.7% and the Nasdaq Composite shed 0.9%.

The central bank reduced its overnight borrowing rate by 25 basis points to a target range of 4.25% to 4.5%, as expected. However, the Fed indicated it would only cut rates twice in 2025, according to its closely watched “dot plot,” fewer than the four cuts given in its last forecast. Fed Chair Jerome Powell said the central bank’s move to cut rates in recent months allows it to “be more cautious as we consider more adjustments to our policy rate.”

The odds of a rate cut at the Fed’s next meeting in January fell to just 11%, according to fed funds futures trading via the CME FedWatch tool.

“I think what they’re trying to do is lay the groundwork for being able to have a more cautious approach to monetary easing next year,” said David Kelly, chief global strategist for JP Morgan Asset management.

“Right now, there is sort of this lull between administrations. I think at some stage there’s going to be some pressure on them from the administration to be more easy,” he added. “So I think they are trying to put a stake in the ground saying, ‘This is what you should expect from us’ so they can try to avoid or postpone any fight with the administration next year or in 2026.”

Most stocks turned red following the Fed decision. Nvidia, which fell into correction territory earlier this week, was a rare exception, bouncing about 3%.

The Dow’s losing streak began the session after it closed above 45,000 for the first time ever on Dec. 4. The total losses for the Dow during this futility streak have been mild at about 4%. 

The Dow’s worst funk in decades was mostly caused by a rotation out of old economy shares and into technology stocks, a sector that the century-old measure underweights compared to broader market metrics. Despite the streak, the Dow sits roughly 4% from an all-time high. Other measures of the market are holding up this month, with the S&P 500 about flat for December and sitting less than 1.5% from an all-time high. The Nasdaq is up 4% this month as investors flooded into tech shares, while shunning the Dow.