Traders work on the floor of the New York Stock Exchange in New York City.
The Dow Jones Industrial Average narrowly snapped its longest losing streak since 1974 on Thursday.
The 30-stock Dow added 15.37 points, or 0.04% to close at 42,342.24. The S&P 500 slid 0.09% to 5,867.08, while the Nasdaq Composite fell 0.10% to 19,372.77.
Though the major averages initially rebounded to start the session – with the Dow up more than 460 points and the S&P 500 up more than 1% at their respective highs of the day – they shed their gains as the day went on, resulting in a very weak close. Seven of the 11 sectors of the S&P 500 ended the day lower.
The 10-year Treasury yield also rose for a second day, topping 4.5% and pressuring stocks. The benchmark yield surged more than 13 points in the previous session.
The major averages plunged Wednesday after the Federal Reserve struck a heavy blow against the roaring bull market, signaling that it was likely to cut interest rates only twice next year, down from the four reductions that had been penciled in during its last forecast, in September. The central bank also trimmed its benchmark overnight borrowing rate a quarter percentage point Wednesday, to a target range of 4.25% to 4.5%, but the question now is what policymakers will do in 2025.
"I think that this correction could last a bit," Paul Meeks, Harvest Portfolio Management's co-chief investment officer, told CNBC's "Squawk Box" on Thursday. "You've seen the marquee name Nvidia come down, so what I would expect people to do [and] what I would recommend people to do is to maybe keep some powder dry."
Volatility took a step down Thursday, with the Cboe Volatility Index pulling back nearly 13% to about 24. Wall Street's so-called "fear gauge" soared Wednesday to as high as 28.27, reflecting heightened investor uncertainty over the path of interest rates.
Money Report
Fed Chair Jerome Powell didn't offer investors much in the way of immediate comfort Wednesday following the Fed meeting.
"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, 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."
Leading up to Wednesday's rate move, Wall Street was betting on the Fed to stay more aggressive in lowering borrowing costs, which affect everything from what companies pay to raise capital to how much it costs consumers to buy a new house or car.
But with the revamped Fed outlook, the Dow Jones Industrial Average slid 1,123.03 points, or 2.58%, to 42,326.87 — posting its longest losing streak since 1974. The S&P 500 tumbled 2.95%, and the Nasdaq Composite lost 3.56%.
Dow closes higher
The Dow Jones Industrial Average closed slightly higher on Thursday, with the index rebounding from 10 straight losing sessions.
The 30 stock Dow ticked up 15 points, or 0.04%, to close at 42,342.24. The S&P 500 pulled back 0.09% to finish the session at 5,867.08, while the Nasdaq Composite slipped 0.1% to 19,372.77.
— Brian Evans
House Republicans say they’ve reached a deal to head off government shutdown
Key House Republicans said on Thursday afternoon that they reached a short-term government funding deal to prevent a government shutdown that would have started on Friday evening.
The accord comes after President-elect Donald Trump indicated he would not support a measure that doesn't include a debt ceiling increase.
"Our Country is far better off closing up for a period of time than it is agreeing to the things that the Democrats want to force upon us," Trump wrote on Truth Social.
Read the latest on the funding deal from CNBC's Christina Wilkie here.
—Darla Mercado
Wall Street’s fear gauge — the VIX — saw second-biggest spike ever on Wednesday
Wall Street's fear gauge — the VIX — spiked by the second biggest percentage in its history on Wednesday, after the Federal Reserve jolted the stock market by saying it would dial back its rate-cutting campaign.
The CBOE Volatility Index surged 74% to close at 27.62, up from around 15 earlier in the day. That surge is the second-greatest in history, behind a 115% leap to above the 37 handle back in February 2018 when there was a blow-up in funds tracking the volatility index.
Wednesday's move comes after the central bank said it will likely lower interest rates just twice next year, down from the four cuts it projected back in September, alarming investors who wanted low rates to keep fueling the bull market. The Dow Jones Industrial Average tumbled by 1,100 points to its 10th straight loss.
— Sarah Min
Wharton professor Jeremy Siegel says Wednesday sell-off was 'healthy' for the market
A disappointing rate outlook by the Federal Reserve sent stocks lower Wednesday, with the Dow Jones Industrial Average tanking more than 1,100 points. But Jeremy Siegel, professor emeritus of finance at the University of Pennsylvania, viewed the massive pullback as an ultimately "healthy" move for the market.
"The market [had been] in almost a runaway situation ... and this brought them to reality that we are just not going to get as low interest rates" as investors had previously forecast, Siegel told CNBC's "Squawk Box Asia." "The market was overly optimistic ... so I am not surprised at the sell-off."
Siegel forecasts just one or two rate reductions for next year. With the Fed raising its inflation forecast going forward, there is also "a chance of no cut" in 2025, the professor added.
CNBC readers can find the full article here.
— Lisa Kailai Han, Anniek Bao
Hims & Hers, Darden, Micron among stocks making biggest midday moves
Check out the companies making headlines in midday trading.
- Hims & Hers — Shares of the telehealth startup lost more than 10% after the U.S. Food and Drug Administration said tirzepatide, the active ingredient in Eli Lilly's diabetes treatment Mounjaro and weight loss drug Zepbound, is no longer in shortage. Hims & Hers gives access to GLP-1 injections that contain semaglutide, the active ingredient in Novo Nordisk's Ozempic and Wegovy, which compete with Mounjaro and Zepbound.
- Darden Restaurants — The stock popped more than 15% after Darden reported better-than-expected same-store sales growth at Olive Garden and LongHorn Steakhouse, putting the stock on track for its best day since 2020.
- Micron Technology — The chipmaker's stock slumped more than 16% after the company issued weaker-than-expected fiscal second-quarter guidance, putting the stock on track for its worst day since March 2020. CEO Sanjay Mehrotra said its "consumer-oriented markets are weaker in the near term," and the firm anticipates a return to growth in the second half of the fiscal year.
For the full list, read here.
— Pia Singh
Micron sinks nearly 17%, heads for worst day since March 2020
Micron shares shed nearly 17% on Thursday, putting the memory chipmaker on pace for its worst session since March 2020.
The declines came after the company forecast weak guidance for the second quarter, saying it expects revenue of $7.9 billion, plus or minus $200 million, and adjusted earnings per share of $1.43, plus or minus 10 cents. Analysts polled by LSEG were expecting revenue of $8.98 billion and EPS of $1.91.
The declines came even after the company topped estimates for the current quarter.
— Samantha Subin
Restaurant stocks rise in sympathy with Darden
Other restaurant stocks rose in tandem with Darden Restaurants on Thursday.
Darden, the parent company of brands such as Olive Garden and LongHorn Steakhouse, surged 15% on Thursday to a new all-time high on the back of a fiscal second-quarter adjusted earnings and revenue beat. The stock was last on track for its best day since November 2020.
Fellow restaurant stocks also rose in tandem, including Brinker International, which owns Chili's; Texas Roadhouse and Cheesecake Factory.
— Lisa Kailai Han
Wednesday was worst-ever Fed day for S&P 500, investment group says
The S&P 500 slid close to 3% on Wednesday. That marked its worst performance on record during a Federal Reserve interest rate announcement day, according to Bespoke Investment Group.
The broad index fell after the Fed indicated that it would cut rates less than previously expected next year. Wednesday recorded the biggest one-day drop for the S&P 500 since the global market rout on Aug. 5.
— Alex Harring
GDP grew at 3.1% pace in Q3, faster than prior estimate
The U.S. economy grew at a faster pace in the third quarter than previously estimated, according to the third and final estimate Thursday from the Commerce Department.
Gross domestic product accelerated at a 3.1% seasonally adjusted annualized pace during the July-through-September period, 0.3 percentage point better than the previous estimate and above the 2.9% Dow Jones consensus estimate.
Consumer spending, which accounts for about two-thirds of all activity in the $29.4 trillion U.S. economy, rose 3.7% in the quarter, 0.2 percentage point faster than the prior estimate.
— Jeff Cox
Stocks open higher
Stocks opened higher on Thursday, with the Dow Jones Industrial Average rebounding from its 10th straight losing session.
The 30-stock Dow gained 446 points, or 1%. The S&P 500 ticked up 1%, while the Nasdaq Composite was 0.8% higher.
— Brian Evans
Weekly jobless claims drop more than expected
Initial filings for unemployment benefits fell back to their recent trend last week after briefly spiking higher, the Labor Department reported Thursday.
Jobless claims totaled 220,000 for the period ending Dec. 14, a decline of 22,000 from the previous period and lower than the Dow Jones estimate for 230,000. The four-week moving average, which accounts for volatility in the numbers, edged higher to 225,500.
Continuing claims, which run a week behind, nudged lower to 1.874 million.
— Jeff Cox
Stocks on the move before the bell Thursday
These are the stocks making the biggest moves in premarket trading:
- Micron — The chip stock plunged nearly 13% in premarket trading after the chipmaker issued weaker-than-expected second-quarter guidance. First-quarter revenue was in line with analysts' expectations, while earnings topped estimates, however.
- Lamb Weston — Shares of the frozen potato maker sank 18% after the company posted quarterly results that fell short of estimates on the top and bottom lines. The company also named a new CEO as it faces ongoing pressure from activist investor Jana Partners to switch up its leadership team.
- Darden Restaurants — The parent of Olive Garden and LongHorn Steakhouse jumped 8% after reporting an earnings and revenue beat for its fiscal second quarter. Darden also raised its full-year revenue guidance.
— Samantha Subin
Innodata rises following Wedbush initiation
Innodata shares jumped more than 2% in premarket trading on Thursday after Wedbush joined the bull camp.
Thursday's pop comes after Wedbush's Daniel Ives initiated coverage of the data engineering stock with an outperform rating. Ives' price target suggests shares can surge more than 40% above Wednesday's closing level.
"Innodata's expertise in data annotation and AI over its decades of experience will lead the company to be a leader" in custom large language models, Ives told clients.
CNBC Pro subscribers can click here to read more about his call.
— Alex Harring
Bank of America downgrades shares of Micron after earnings
Bank of America is stepping to the sidelines on Micron Technology on the heels of its latest quarterly results.
Analyst Vivek Arya downgraded shares to neutral from buy and slashed his price target, which now implies nearly 6% upside from Wednesday's close.
The call comes as the company's second-quarter forecast came in weaker than expected. Looking ahead, Arya anticipates that the company's gross margin will remain "weak" for both its second and third quarters.
"We see muted near-term memory pricing environment on lackluster PC/phone demand, putting pressure on GM for the foreseeable future," the analyst said in a Thursday note.
Shares plunged around 13% in the premarket following the company's results and Arya's call. This year, the stock has risen almost 22%, underperforming the S&P 500 in year-to-date gains.
— Sean Conlon
European markets fall over 1% as trading begins
European markets were lower as trading kicked off on Thursday, with the pan-European Stoxx 600 falling 1.26% shortly after markets opened. All sectors started the day in negative territory.
Major European bourses also pulled back, with Germany's DAX last 1.07% lower, the French CAC 40 falling 1.29% and the U.K.'s FTSE 100 down 1.17%.
— Sophie Kiderlin
Asia markets tumble as Fed’s dovish pivot prompts broader sell-off
SINGAPORE — Asia-Pacific stocks and currencies fell Thursday, amid a broader market sell-off after the U.S. Federal Reserve delivered its third consecutive rate reduction and signaled fewer rate cuts ahead.
The Japanese yen dipped 0.74% to 155.94 against the greenback, hitting a one-month low, as Bank of Japan kept its interest rate unchanged.
The Nikkei 225 lost 0.69% to end at 38,813.58, while Topix was down 0.22%, finishing at 2,713.83.
In South Korea, the Kospi index dropped 1.95% to close at 2,435.93 and the Kosdaq index declined 1.89% to 684.36.
The South Korean won hovered near its weakest level since March 2009, and was last trading at 1,452.33 on the U.S. dollar.
Hong Kong's Hang Seng index declined 0.33% in the final hour of trade, while the mainland China's CSI 300 index edged up slightly to close at 3,945.46.
— Anniek Bao
Fed policy shift supports crypto sector long-term, says Galaxy's Chris Rhine
The Fed's expectations of inflationary pressures from the incoming Trump administration's policies could benefit crypto prices in the long term, according to Galaxy's Chris Rhine.
"While cryptocurrencies are experiencing a short-term sell-off alongside equities, this shift ultimately supports the cryptocurrency sector, traditionally viewed as a hedge against inflation and monetary debasement," said Rhine, portfolio manager for the actively managed SPDR Galaxy ETFs.
"The broader driver for digital asset markets remains the increasing likelihood of greater adoption as an asset class, aided by regulatory progress and political support," he added. "Short-term sell-offs should be seen as buying opportunities, as many investors are waiting on the sidelines for a pullback."
Bitcoin was last lower by more than 5% at $100,953.25, according to Coin Metrics. The broader crypto market, as measured by the CoinDesk 20 index, lost more than 7%.
— Tanaya Macheel
Micron Technology, Lennar among stocks making moves after market close
Here are some of the stocks that made moves in after-hours trading on Thursday:
- Micron Technology shares plunged 15% after the chipmaker posted disappointing guidance for the second quarter. Still, the company posted in-line revenue results and beat quarterly earnings expectations, posting adjusted earnings per share of $1.79 on revenue of $8.71 billion, while analysts polled by LSEG forecasted earnings of $1.75 per share.
- Lamb Weston shares dipped 3.5% as the food processing company continues to be under pressure from an activist investor to sell itself to Post Holdings.
- Shares of homebuilder Lennar sank 8.4%. The company reported a profit of $4.06 a share, while analysts surveyed by FactSet had called for earnings of $4.15 a share. Higher mortgage rates, from higher interest rates, in the most recent quarter impacted the company's performance.
— Pia Singh
Nvidia notches longest losing streak since September 2023
Nvidia fell 1% on Wednesday and fell for a fifth straight day for the first time since September 2023.
The moves added to Nvidia's roughly 4% week-to-date loss and nearly 7% drop since the start of December. The market bellwether had been up by more than 4% earlier in the session Wednesday.
Shares of Nvidia have jumped more than 160% since the start of 2024.
— Samantha Subin
Stock futures open little changed
Stock futures were little changed on Wednesday night, after the market plunge from the earlier session.
Futures tied to the Dow Jones Industrial Average opened roughly 60 points higher, or 0.14%. S&P 500 futures were just above flat, while Nasdaq 100 futures opened 0.1% lower shortly after 6 p.m. ET.
— Pia Singh
