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CNN
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The Dow plunged on Wednesday due to a disappointing outlook from the Federal Reserve. The blue-chip index extended its losing streak to 10 days – the longest such period since Gerald Ford’s presidency.

The Dow Jones Industrial Average ended the day down about 1,123 points, or 2.6%, after the Fed indicated in a policy statement that it forecasts only two interest rate cuts in 2025, rather than the four previously forecast. The Fed now expects inflation to remain stubbornly above its target range for longer than originally expected.

The Dow Jones has fallen for 10 consecutive days, the first time it has experienced such a long losing streak since September 20 through October 4, 1974, when the index fell for 11 straight sessions.

By Wednesday’s plunge, the Dow had fallen as broader markets remained strong. The Dow has lost less than 6% in its long losing streak, a relative dip. Other indexes were at or near record highs before falling sharply on Wednesday. The S&P 500 fell 2.8% and the Nasdaq Composite Index fell 3.4%.

Investors expected the Fed to cut interest rates by a quarter point on Wednesday, which is exactly what the central bank did. But markets plunged after the Fed said it expected only two interest rate cuts in 2025, a signal that monetary conditions remain tight. Stocks and bonds fell in response to the Fed’s “hawkish rate cut,” said Jay Hatfield, CEO and CIO of Infrastructure Capital Advisors.

“The market was disappointed with the likely future direction of interest rates,” said Chris Zaccarelli, CIO at Northlight Asset Management.

UnitedHealth Group’s 15% decline this month has particularly dragged down the Dow. The insurance giant’s selloff began after the fatal shooting of UnitedHealthcare CEO Brian Thompson. Ironically, UnitedHealth was about 3.3% higher on Wednesday.

Nvidia, the US chipmaker that joined the Dow in November, has also pushed the 30-stock index lower. While Nvidia shares have risen over 180% this year, they have fallen about 5% in the last month, contributing to the Dow’s decline.

Despite the long decline, the Dow remains 14% higher this year and is up more than 5,000 points in 2024.

Markets initially rose sharply following the election results and investors breathed a sigh of relief that recounts and court battles were avoided. There was also great enthusiasm about Trump’s promise to cut bureaucracy and taxes.

This is a developing story and will be updated.