Stock futures showed modest gains Wednesday evening as investors processed the Federal Reserve's decision to curb its rate-cutting trajectory. The Fed signaled only two interest rate reductions next year, down from the previously projected four. While the Fed lowered its benchmark rate by a quarter percentage point, its hawkish stance fueled uncertainty about future monetary policy, leading to a sharp decline in the stock market earlier in the day.
Stock futures are little changed Wednesday night as investors adjust to a new, sobering reality for financial markets.
Chair Jerome Powell didn't offer investors much in the way of immediate comfort."We're at 4.3% — that's meaningfully restrictive and I think it's a well-calibrated rate for us to continue to make progress on inflation while keeping a strong labor market," Powell said at a press conference following the Fed meeting, noting that cutting rates in recent months has allowed the central bank to"be more cautious as we consider more adjustments to our policy rate.
The Cboe Volatility Index, known as Wall Street's"fear gauge" also soared, signaling heightened investor uncertainty over the path of interest rates.
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