Stock Market Plummets After Fed Rate Cut, Experts Warn of Volatility

The Dow Jones Industrial Average dropped about 1,100 points, or 2.5%, marking its 10th consecutive day of losses. The S&P 500 plummeted nearly 3%, which amounted to the largest dip the index has taken following a Fed meeting since 2001, according to data shared with ABC News by Deutsche Bank Research.

The market's sudden wobble poses a key question: Is this a blip on the path to further gains, or a sign of even worse losses to come?Experts who spoke to ABC News described the selloff as an omen of tumultuous days ahead, pointing to a potentially prolonged spell of volatility. Despite this uncertainty, experts told ABC News that the economy continues to rest on sound footing, retaining the positive outlook for mid- and long-term gains. 'We're used to the market going straight up for so many months, and there's going to be more volatility from here,' Ed Yardeni, the president of market advisory firm Yardeni Research and former chief investment strategist at Deutsche Bank's U.S. equities division, told ABC News.The stock market indeed appeared to rebound in early trading on Thursday, recovering some of the previous day's losses. The Dow climbed about 250 points, or 0.6%, while the S&P 500 jumped 0.7%. The Nasdaq gained nearly 1%. The Fed announcement Wednesday afternoon that triggered the alarm on Wall Street included news that the central bank cut interest rates a quarter of a percentage point, but also a fresh projection anticipating fewer interest rate cuts than expected just a few months ago: only a half a percentage point of rate cuts next year and another half-percent cut in 2026. Lower interest rates typically stimulate economic activity over the long term, keeping the economy growing and safeguarding the labor market. They also tend to drive up corporate profits and stock prices. In theory, a longer-than-expected period of high interest rates could diminish those returns.

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