On Wednesday, US benchmark equity indexes were poised to close lower following the Federal Reserve's decision to reduce its benchmark lending rate by 25 basis points, signaling fewer cuts ahead than previously anticipated in September. The Nasdaq Composite experienced a notable decline of 3.2%, settling at 19,476.3, while the S&P 500 fell 2.3% to reach 5,909.9.
The Dow Jones Industrial Average also saw a decrease of 1.9%, bringing it to 42,629.3. Every sector experienced losses, with consumer discretionary leading the downward trend. The Federal Open Market Committee (FOMC) lowered interest rates to a range of 4.25% to 4.50%, aligning with Wall Street's expectations.
Furthermore, the FOMC's updated Summary of Economic Projections indicated an increase in members' median outlook for the federal funds rate for 2025, adjusting it to 3.9% from the 3.4% projected in September. Projections for 2026 rose to 3.4% from 2.9%, and for 2027, the outlook shifted from 2.9% to 3.1%.
In related moves, the US 10-year yield surged by 11.9 basis points to 4.50%, while the two-year rate jumped by 11.1 basis points to 4.35%. Meanwhile, West Texas Intermediate crude oil saw a modest increase of 0.2%, settling at $70.22 a barrel..