On Thursday, Wall Street concluded the trading session with little change, as the Dow Jones Industrial Average, a key stock market index, managed to secure a modest increase, thereby ending a 10-day losing streak that was the longest in half a century. The Dow Jones closed with a rise of 0.4%, or 15.37 points, settling at 42,342. Meanwhile, the S&P 500 and the Nasdaq Composite, representing a broader market and technology stocks respectively, experienced marginal fluctuations, closing with a slight decrease of approximately 0.1%.

Initially, all major indices started the day on a positive note, recouping some of the significant losses from the previous day following the Federal Reserve's decision to reduce its projection for interest rate cuts in the upcoming year. However, they struggled to maintain these gains as the yield on the 10-year Treasury note climbed for the second consecutive day, reaching 4.569%. This increase was driven by expectations that interest rates would remain elevated for an extended period. Elevated interest rates can increase borrowing costs for corporations, potentially impacting their profitability and the valuation of their stocks.

The Federal Reserve lowered its key short-term federal funds rate by a quarter of a percentage point on Wednesday evening, as anticipated. However, it also reduced its forecast for rate cuts in the next year, expecting only two reductions of a quarter percentage point each, amidst predictions of higher inflation. This is a decrease from the September forecast, which anticipated four quarter-point rate cuts. The prospect of fewer rate cuts and higher inflation led to a sharp decline in all three major U.S. stock indices, marking their most significant daily drops since August.

Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, commented on the situation, saying, "Santa arrived early and placed a 25 basis point rate cut in the market's stocking, but also included a note indicating that there would be coal next year."

The U.S. economy demonstrated robust growth, expanding at a 3.1% seasonally adjusted annual rate between July and September. This figure exceeded the previous estimate of 2.8% by the Commerce Department and was also higher than the 2.9% consensus forecast by Dow Jones. Consumer spending, which constitutes approximately two-thirds of all activity in the $29.4 trillion U.S. economy, increased by 3.7% in the quarter, which was faster than the earlier estimate of 3.5% and the quickest pace since early 2023.

Sales of existing homes in November surged 6.1% compared to the previous year, representing the largest annual increase in over three years. Eugenio Aleman, Chief Economist at Raymond James, stated that this report supported the Federal Reserve Chairman's earlier assertion this week that "there are no signs, for now, of economic weakness."