U.S. stocks plunged into one of their worst days of the year after the Federal Reserve suggested on Wednesday that it may provide less adrenaline to the U.S. economy in 2025 than previously thought. The S&P 500 fell 2.9%, just shy of its biggest loss of the year since the summer, to move further away from its all-time high hit a few weeks ago. The Dow Jones Industrial Average lost 1,123 points, or 2.6%, and the Nasdaq Composite fell 3.6%. The Fed said Wednesday it is cutting its benchmark interest rate for the third time this year, continuing the sharp reversal that began in September when it began cutting interest rates to a two-decade high to support the labor market . However, this cut was widely expected. The bigger question is how much more the Fed will cut next year. A lot depends on it, especially after expectations of a series of interest rate cuts in 2025 helped the U.S. stock market hit an all-time high at least 57 times in 2024. Fed officials released forecasts Wednesday showing the average expectation among them is two more cuts in the federal funds rate in 2025, or by half a percentage point. That’s fewer than the four cuts expected just three months ago. “We are in a new phase of the process,” Fed Chairman Jerome Powell said after the central bank quickly cut its key interest rate by a full percentage point since September to a range of 4.25% to 4.50%. Asked why Fed officials want to slow their rate cuts, Powell pointed out that the job market appears to be doing well overall and that recent inflation readings have increased. He also pointed to uncertainties that will require policymakers to respond to upcoming, yet-to-be-determined changes in the economy. While lower interest rates can stimulate the economy by making borrowing cheaper and raising the price of investments, they can also provide more fuel for inflation. Powell said some Fed officials, but not all, were already trying to take into account the uncertainties associated with a new administration entering the White House. Concern is growing on Wall Street that President-elect Donald Trump’s preference for tariffs and other measures could further boost inflation and economic growth. “If the path is uncertain, go a little slower,” Powell said. It is “not unlike driving on a foggy night or entering a dark room full of furniture. You just slow down.” One official, Cleveland Fed President Beth Hammack, said the central bank shouldn’t have even cut interest rates this time. She was the only one to vote against Wednesday’s rate cut. Lower expectations of interest rate cuts in 2025 caused Treasury yields to rise in the bond market and put pressure on the stock market. The 10-year Treasury yield rose to 4.50% from 4.40% late Tuesday, a notable move for the bond market. The two-year yield, which is more in line with expectations of Fed action, rose to 4.35% from 4.25%. On Wall Street, stocks of companies that may feel the most pressure from higher interest rates posted some of the worst losses. Smaller company stocks, for example, performed poorly. Many need to borrow to fuel their growth, which means having to pay higher interest rates on loans can be more painful for them. The Russell 2000 index of small-cap stocks fell 4.4%. Elsewhere on Wall Street, General Mills fell 3.1% despite reporting higher-than-expected profit for its latest quarter. The maker of Progresso soups and Cheerios said it would increase its investments in brands to help them grow, leading it to cut its profit forecast for this fiscal year. Nvidia, the superstar responsible for some of Wall Street’s record gains in recent years, fell 1.1%, extending its weeks-long slump. It has fallen more than 13% from its record set last month in nine of the last 10 days as its great momentum fades. On Wall Street’s winning side, Jabil rose 7.3%, helping to become the market leader, after reporting higher earnings and revenue in the latest quarter that exceeded analysts’ expectations. The electronics group also increased its sales forecast for the full financial year. Overall, the S&P 500 fell 178.45 points to 5,872.16. The Dow Jones Industrial Average fell 1,123.03 to 42,326.87 and the Nasdaq Composite slipped 716.37 to 19,392.69. In overseas stock markets, London’s FTSE 100 rose less than 0.1% after data showed inflation accelerated to 2.6% in November, the highest in eight months. The Bank of England is also meeting this week to discuss interest rates and will announce its decision on Thursday. In Japan, where the Bank of Japan concludes its own interest rate meeting on Friday, the Nikkei 225 slipped 0.7%. That’s despite a 23.7% rise for Nissan Motor Corp., which said it was in talks to work more closely with Honda Motor Co., although no decision had been made on a possible merger. Honda Motor shares fell 3%. Nissan, Honda and Nissan alliance member Mitsubishi Motors Corp. agreed in August to share electric vehicle components such as batteries and jointly research autonomous driving software to better adapt to dramatic changes in the auto industry.___AP Writer Zimo Zhong contributed.