Market Movers: Fed's Surprising Rate Forecast Impacts Wall Street

Wall Street's indices opened higher following unexpected Fed projections for fewer rate cuts and higher inflation for 2025. The Fed's hawkish stance caused sharp declines, with expectations adjusted to only one rate reduction by mid-2025. Stocks rallied slightly premarket amidst mixed corporate earnings.

Wall Street's primary indices geared for a positive open on Thursday after the Federal Reserve's projections diverged from market expectations. The Fed announced fewer-than-anticipated interest rate cuts and an increase in inflation forecasts for 2025, catching some investors off guard and leading to notable declines in U.S. stocks.

While traders had expected three rate cuts by next year, recent assessments suggest only one quarter-point reduction is likely by mid-2025. This unexpected hawkish position led to a significant drop in the benchmark S&P 500 and pushed the Dow into its longest losing streak since 1974.

In premarket action, stocks regained some footing. Tech giants Tesla and Nvidia saw over 2% gains, though companies like Micron suffered from poor earnings forecasts. These mixed signals underscore a complex market navigating Federal Reserve policies and shifting economic conditions.

(With inputs from agencies.)