The Dow looks set to break its longest losing slide in 50 years as stocks rebound from the Fed-fueled slide

Markets sold off on Wednesday as Federal Reserve Chairman Jerome Powell explained why the central bank expects to cut interest rates by less than expected.

Wall Street investment strategists argue that the Fed’s “hawkish” shift from a clear easing bias to a stance with greater uncertainty about when and how much interest rates will be cut further likely triggered negative sentiment in markets.

“The tightening turn and the fact that we’re now seeing increasing dissension (among officials) doesn’t really bode well, especially as you head into a year where there’s just this dramatic political uncertainty around inflation.” but also the job market,” Kevin Gordon, senior investment strategist at Charles Schwab, told Yahoo Finance.

Michael Kantrowitz, chief investment strategist at Piper Sandler, told Yahoo Finance that the Fed’s “hawkish tone” was an “extrapolation” of recent market moves, when few stocks in the S&P 500 rose as markets began to consider the prospect pricing in higher interest rates and sticky inflation for most of December.

“I would almost call this a slight reversal from Powell, certainly a second derivative,” Kantrowitz said. “And as we know, markets care about derivatives or rates of change in anything.”

Given the stock market’s stormy bull rally and investor sentiment surging since Donald Trump’s election victory, Powell’s “slight reversal” was enough to push markets over the edge.

“It’s kind of a prime example of a really euphoric, sometimes a little bit exuberant mood, and then a negative catalyst comes along that flips the market,” Gordon said. “And that’s exactly what the Fed meeting was.”