This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open tells investors everything they need to know, no matter where they are. Do you like what you see? You can log in Here.

A cut now, but less ahead
The Federal Reserve on Wednesday cut interest rates by 25 basis points and raised its federal funds rate to a target range of 4.25% to 4.5%. In the Fed’s dot chart showing interest rate expectations for the coming years, the central bank largely indicated just two rate cuts for 2025, fewer than the four cuts previously forecast in September.

The Bank of Japan maintains interest rates
The Bank of Japan left its key interest rate unchanged at 0.25% on Thursday. The yen then weakened to a one-month low against the dollar. Analysts were divided on the BOJ’s move: A CNBC poll showed 54% of respondents expected the BOJ to hold rates, while a Reuters poll of economists expected the BOJ to raise rates.

Strong sell-off in the markets
US markets experienced a sharp sell-off on Wednesday. The Dow Jones Industrial Average lost more than 1,000 points, down 2.58% for the tenth straight day of losses. The S&P 500 decreased by 2.95% and the Nasdaq Composite fell by 3.56%. On Thursday, Asia-Pacific markets followed Wall Street’s slump. South Korea’s Kospi index fell as much as 1.8%, one of the sharpest declines in the region.

Disappointing instructions from Micron
Shares of micron fell more than 15% in extended trading after the company issued weaker-than-expected guidance even as it beat earnings expectations for the latest quarter. For the current quarter, Micron expects sales of around $7.9 billion. That’s far less than the $8.98 billion expected by analysts, according to LSEG.

(PRO) 2025 expectations for European stocks
As the year draws to a close, major investment banks announce their outlook for the European market for 2025. Their views range from cautiously optimistic to somewhat optimistic, although almost all expressed concerns about geopolitics and trade tensions.

Wednesday’s dramatic market selloff is a stark reminder that forecasts influence stock moves much more than current circumstances.

The Fed cut its key interest rate by 25 basis points. Borrowing costs will fall and business investment should be boosted, which should lead to job creation and boost growth. This, in turn, theoretically drives stocks higher.

But investors were already confident about the Fed’s rate cut on Wednesday. Before the Fed meeting concluded in December, the futures market suggested a 98 percent chance of a 25 basis point rate cut, according to the CME FedWatch tool. This means that investors had already priced the benefits of the rate cut into stocks. In other words, yesterday’s cut would have little impact on stock prices.

Investors may have already priced in more than a single rate cut. A week ago, investors were betting on a 20.8 percent chance that the Fed would cut interest rates to between 4 percent and 4.25 percent in January.

Fed Chairman Jerome Powell dashed these hopes.

“With today’s action, we have cut our key interest rate by a full percentage point from its peak, and our monetary policy stance is now significantly less restrictive,” Powell said at his post-meeting press conference. “We can therefore be more cautious when considering further adjustments to our key interest rate.”

The possibility of a 25-point rate cut next month narrowed to 8.6%, according to the futures market, after the Fed released its updated dot chart that showed just two rate cuts for 2025.

It is this shift – from the hope that the Fed will go full throttle on rate cuts to the reality that it may even take its foot off the accelerator – that is roiling markets.

In other words, it’s like waking up on Christmas Day excited to receive a gift and then realizing you’re out of presents. This disappointment wouldn’t happen any other time of year.

As David Russell, global head of market strategy at TradeStation, darkly noted: “Goodbye, punch. No Christmas cheer from the Fed.”

— CNBC’s Daria Mercado, Jeff Cox, Yun Li, Brian Evans and Lisa Kailai Han contributed to this report.