Stocks React to Fed's Surprise Projections

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Fed,Interest Rates,Market Volatility

The Federal Reserve's unexpected economic forecast, suggesting a more aggressive rate-hike path, sent global markets into turmoil. Despite initial volatility, major U.S. benchmarks showed mixed results. The Dow Jones Industrial Average ended its 10-day losing streak, while the S&P 500 and Nasdaq Composite continued to decline.

This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. The Federal Reserve's surprise economic projections, which signaled a more aggressive rate-hike path than previously projected threw markets into turmoil and boosted the strength of the dollar. Global central banks insist their monetary policy is independent of the Fed, but such currency moves could.

Norway's Norges Bank left its rate unchanged at 4.5% and Sweden's Riksbank lowered rates by 25 basis points to 2.5%., which was endorsed by U.S. President-elect Donald Trump. Without a deal and legislation passed, a partial shutdown of the U.S. government is set to begin late Friday night.. While that decision was in line with forecasts, the Monetary Policy Committee's votes surprised markets. Three members of the committee voted to reduce rates, two more than a Reuters poll had predicted. VIX, commonly known as Wall Street's fear gauge because it measures the relative strength of 30-day price changes, jumped on Thursday after the Fed's meeting, though it has since calmed a bit. Despite those worries, there's opportunity in volatility — here's If we adopt an objective eye, the major U.S. benchmarks didn't change much during Thursday's trading session. The S&P 500 slipped 0.09% and the Nasdaq Composite declined 0.10%, but the Dow Jones Industrial Average ticked up 0.04%. But when seen against the context of Wednesday's market rout, the direction of those shifts also gives an indication, however faint, of the narrative animating the markets. To rephrase the stock market on Thursday in such terms: Stocks mostly continued sliding after the Fed unleashed its projections, but the Dow finally broke its 10-day losing streak. It's kind of a mixed ba

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