Major stock indexes tumbled on Wednesday after the Federal Reserve signaled a slower pace of interest rate cuts in 2025 than previously forecast, as it renewed concerns about the speed at which inflation would fall.

The S&P 500 lost 2.4% and the Nasdaq Composite lost nearly 3%, with losses deepening at the close.

The Dow Jones Industrial Average fell more than 1,100 points, posting its biggest loss since August. The Dow’s tenth straight down day is now approaching its worst losing streak in 50 years. While the move is eye-catching, it largely reflects a shift in investors away from more established companies and toward technology stocks, which the Dow tends to give less weight to.

The Fed said it foresees only two rate cuts next year, after forecasting four just a few months ago. The central bank now expects inflation to remain above its 2% target through 2026.

In other words, the Fed is signaling that interest rates will have to stay higher for longer to contain price increases.

That’s bad news for stocks – whose growth tends to be boosted by lower interest rates – but it’s a more mixed picture for the broader economy. In addition to its higher inflation forecasts, the Fed also indicated that the unemployment rate is not expected to rise much above its current level of 4.2%, suggesting that the labor market will remain relatively stable.

“The Fed appears more pleased with the performance of the U.S. economy compared to a few months ago, telling us that inflation concerns are back in play for the Fed,” Charlie Ripley, senior investment strategist at Allianz Investment Management, said in a emailed comment to customers on Wednesday.

The joker remains Donald Trump. The president-elect has promised to impose a wide range of tariffs that economists say will likely lead to price increases. Trump himself stated in an interview with NBC News that he could not guarantee that consumers would no longer pay after implementation.

Trump has cited a variety of reasons for imposing the tariffs — from job creation to revenue increases to national security concerns — without providing a clear picture of how they would ultimately affect the economy in the long run .

The question also remains as to what the US budget situation will look like under Trump’s second term in office. While he has vowed to cut spending to an unprecedented extent, he has also promised to cut taxes, which would boost growth but potentially widen the current deficit.

This is an uncertain trend for economists and monetary policy makers, but one that suggests the economy is likely to continue to strengthen.

“The economic and inflation backdrop does not scream the need for meaningful policy stimulus, while the new government could cause them serious inflation problems next year,” said Seema Shah, chief global strategist at Principal Asset Management, in an emailed comment on Wednesday.