US Market Reaction Ahead Of Fed Meeting; Dow Jones Record Longest Losing Streak Since 1978

The US market extended its losses on December 17, 20254, with Dow Jones falling for nine consecutive sessions, making it the longest losing streak since 1978 for the benchmark. S&P 500 and Nasdaq fell sharply as well. The performance comes ahead of the monetary policy outcomes that will be announced by the US Federal Reserve on Wednesday. In the trade of December 18, US stock futures witnessed a volatile trend.

Although, market is widely estimating a 25 bps rate cut in federal funds rates by FOMC on Wednesday, the concerns of fewer rate cuts in 2025 has dampened sentiment. This is due to consistent inflationary pressures and uncertainties looming over Trump's tariff hikes and policies when he takes over the White House for the second time as US President.

Dow Jones: The Dow Jones Industrial Average ended at 43,449.90, lower by 267.58 points or 0.61%. The index touched an intraday low of 43,336.22 in the trading hours. With the latest downfall, the benchmark has posted its nine-consecutive losing streak, the longest since 1978. The losses in Dow Jones emerged after it logged above 45,000 for the first time earlier in the current month.

S&P 500: The index also dropped by 23.47 points or 0.39% to end at 6,050.61.

Nasdaq Composite: The tech-heavy index has plunged by 64.83 points or 0.32% to close at 20,109.06.

According to Trading Economics data, the central bank is widely expected to lower rates by 25 basis points but may signal fewer rate cuts than previously indicated in 2025, given persistent inflationary pressures. In regular trading on Tuesday, the Dow dropped 267.6 points, or 0.61%, marking its ninth consecutive loss, the longest streak since 1978. The S&P 500 and Nasdaq Composite also saw declines, falling 0.39% and 0.32%, respectively. Ten of the 11 S&P sectors closed lower, with industrials, energy, and financials leading the downturn. Among individual stocks, major tech companies such as Nvidia (-1.2%) and Broadcom (-3.9%) suffered sharp losses, while Tesla continued its rally, gaining 3.6%.

FOMC has concluded its two-days meeting from December 17, which is chaired by Jerome Powell. Th outcomes of the policy will be announced on December 18. In the past two policies, the Fed has trimmed fund rates by 75 bps. The latest cut was in November by 25 bps to to 4-1/2 to 4-3/4 percent.

Fed's objective is to achieve maximum employment and inflation at the rate of 2 per cent over the longer run. FOMC's policy outcomes takes into consideration a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.