S&P 500 drops below 6000 as less rate cuts get pencilled in for next year – US Market Wrap

US markets fell and bond yields rose as the Federal Reserve cut interest rates by a quarter point, as expected, but reduced its projections for cuts in 2025.

The S&P 500 plummeted below 6,000 points, its weakest day since August. The Nasdaq 100 fell 3.6%, the largest in five months.

The policy-sensitive two-year US Treasury yield increased by 10 basis points to 4.35%, while the 10-year rate climbed to a level last seen in May.

Fed Chair Jerome Powell emphasised  Today that the central bank will be more cautious when considering any policy rate adjustments. He also stated that it was still “meaningfully restrictive” and that the committee was “on track to continue to cut.”

Markets are reacting to some Fed members forecasting fewer rate cuts next year than projected a few months ago. Traders are now pricing in less than a half-point drop in 2025.