Global Markets Slide On Fed's Hawkish Rate Policy; U.S. Dollar Eases Slightly After Hitting Two-Year High - Global Markets Today While US Slept

On Wednesday, December 18th, U.S. markets closed sharply lower, with the Dow dropping over 1,100 points—its steepest decline since August and longest losing streak since 1974. The Fed cut rates by 25 basis points as expected but signaled fewer cuts in 2025. Markets reacted sharply to the less dovish tone despite assurances of economic strength and progress on inflation.

Fed Chair Powell adopted a hawkish tone as the Fed cut rates by 0.25% but reduced 2025 rate cut projections to two, down from four in September and below market expectations.

The U.S. current account deficit widened to $310.9 billion in Q3, exceeding the estimated $284 billion. Housing starts fell 1.8% in November to an annualized 1.289 million units from 1.312 million in October.

S&P 500 ended in the red, with consumer discretionary, real estate, and communication services stocks suffering the largest declines.

The Dow Jones Industrial Average was down 2.58% and closed at 42,326.87, the S&P 500 closed lower by 2.95% at 5,872.16, and the Nasdaq Composite slipped 3.56% to finish at 19,392.69.

Asia Markets Today

• On Thursday, Japan’s Nikkei 225 declined 0.80% and ended the session at 38,808.50, led by losses in the Communication, Steel, and Transportation Equipment sectors.
• Australia’s S&P/ASX 200 fell 1.70% and ended the day at 8,168.20, led by losses in the Gold, IT, and Materials sectors.
• India’s Nifty 50 slid 0.98% to 23,961.95, and Nifty 500 was down 0.77%, closing at 22,757.65, led by losses in the Banking, Consumer Durables, and Capital Goods sectors.
• China’s Shanghai Composite fell 0.36% to close at 3,370.03, while the Shenzhen CSI 300 gained 0.09%, finishing the day at 3,945.46.
• Hong Kong’s Hang Seng was down 0.56% and closed the session at 19,752.51.

Eurozone at 05:30 AM ET

• The European STOXX 50 index was down 1.60%.
• Germany’s DAX slid 1.12%.
• France’s CAC fell 1.49%.
• U.K.’s FTSE 100 index traded lower by 1.27%.
• European stocks fell as the Fed signaled slower rate cuts in 2025. Rate-sensitive tech stocks led losses, while bond yields spiked and commodities declined.

Commodities at 05:30 AM ET

• Crude Oil WTI was trading lower by 0.71% at $70.08/bbl, and Brent was up 0.07% at $73.44/bbl.
• Natural Gas rose 2/16% to $3.447.
• Gold was trading lower by 0.78% at $2,632.79, Silver was down 2.23% to $30.027, and Copper fell 1.62% to $4.0903.

U.S. Futures at 05:30 AM ET

Dow futures were up 0.40%, S&P 500 futures rose 0.48% and Nasdaq 100 futures gained 0.47%.

Forex at 05:30 AM ET

• The U.S. dollar index was down 0.13% to 107.89, the USD/JPY rose 1.35% to 156.89, and the USD/AUD slid 0.42% to 1.6012.
• The U.S. dollar surged to a two-year high after the Fed signaled fewer rate cuts in 2025, pressuring global currencies. However, it slipped Thursday amid thin holiday trading, with the euro and Canadian dollar, and won fluctuating sharply.

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