Wall Street closed Thursday in about the same shape, with the blue-chip Dow managing to eke out a small gain to snap a 10-day losing streak, the longest in 50 years.
The Dow ended up 0.4%, or 15.37 points, at 42,342. Both the broad S&P 500 and the tech-heavy Nasdaq showed minimal change at closing, down about 0.1%.
All of the indexes had opened higher, recovering some of Wednesday’s steep losses after the Federal Reserve pulled back its forecast for rate cuts next year. But they were unable to hold onto gains as the 10-year yield rose for a second straight day, to 4.569% based on expectations rates would stay higher for longer. Higher rates boost borrowing costs for companies, which can hurt profits and stock valuations.
The Fed lowered its benchmark, short-term fed funds rate late Wednesday by a quarter percentage point, as expected, but pared back its forecast for rate cuts next year. It only expects to cut its rate twice, by a quarter percentage point each time amid forecasts of higher inflation. That’s down from its September forecast for four rate cuts at a quarter-point each. Prospects for fewer rate cuts and higher inflation pummeled all three primary U.S. stock indexes, which posted their sharpest daily declines since August.
“Santa came early and dropped a 25 (quarter percentage point) rate cut in the market’s stocking but accompanied it with a note saying that there would be coal next year,” said Chris Zaccarelli, chief investment officer for Northlight Asset…
