The stock market swooned Wednesday as it reacted to news that might not seem so bad at first glance: The Federal Reserve could cut interest rates less frequently in 2025 than experts had predicted.

The Dow Jones Industrial Average lost 2.6%, or 1,123 points, to close at 42,327. The S&P 500 lost nearly 3% to close at 5,872. The Nasdaq Composite lost 3.6% to close at 19,393.

The S&P 500 and Nasdaq have traded at or near record highs in recent days, partly in anticipation of a Fed rate cut.

But the Dow has had a long December. Wednesday marked the 10th^Th The index posted consecutive losing streaks, the longest decline since 1974. A four-digit decline in a single day is a rare event.

The Federal Reserve cut its key interest rate by a quarter point on Wednesday, a move that forecasters had predicted and largely welcomed.

Invest wisely: Best online brokers

The Fed now forecasts fewer rate cuts in 2025

However, the Fed also forecasts a much slower pace of interest rate cuts next year, partly in response to rising inflation. Analysts are forecasting only two interest rate cuts for 2025, half as many as a few months ago.