Mass. Financial advisors react to the Dow Jones closing price at 1,100 points

U.S. stocks posted their second-biggest fall of the year on Wednesday as hopes for interest rate cuts in 2025 faded.

The Dow Jones closed down more than 1,100 points, marking its longest losing streak since 1974.

This comes after the Federal Reserve planned just two rate cuts next year, instead of the four that were on the radar.

The Federal Reserve announced it is cutting its key interest rate for the third time this year. The big question, however, is how much more the Federal Reserve could cut next year.

“There was a market sell-off today because one of the biggest companies said it expects more growth, a robust job market and things that are fundamentally good for our economy,” said Mike Armstrong of Armstrong Advisory Group.

“This may not be good for stocks in the short term. That’s one of the things I think we can get past. But in practice it means: If you’re aiming for a 6% mortgage rate any time soon, that’s probably not going to happen, at least in the Federal Reserve’s opinion.”

The Federal Reserve said stubborn inflation rates combined with yet-to-be-determined changes in the economy and uncertainty over a new presidential administration were some of the factors that led to calls for slower rate cuts.

Federal Reserve Chairman Jerome Powell said, “When the path is uncertain, take things a little slower,” and said that was their approach, at least for now.