U.S. Stocks End Little Changed After Fed Rate Cut Forecasts

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FEDERAL RESERVE,INTEREST RATES,INFLATION

U.S. stocks ended with minimal change on Thursday, reversing an initial recovery following a significant decline in the previous session. The Federal Reserve's forecast of fewer-than-expected interest rate cuts and elevated inflation for the next year contributed to the market's subdued performance.

NEW YORK (Reuters) -U.S. stocks ended little changed on Thursday, giving up an initial rebound from a sharp drop in the prior session after the Federal Reserve forecast fewer-than-expected interest rate cuts and higher inflation next year. Economic data was in sync with the Fed's view, with weekly initial jobless claims falling more than expected while gross domestic product for the third quarter was revised to show a 3.1% increase from the previously reported 2.8% pace.

'It clearly sent a message that rates weren't going to keep going down if inflation didn't continue its decline, and we've seen inflation tick up a bit here, and that's a concern to the Fed,' said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.The Dow barely managed to snap a ten-session losing skid, its longest streak since 1974. The Dow and S&P 500 suffered their biggest one-day percentage drop since early August, while the Nasdaq suffered its biggest daily fall since July after the Fed on Wednesday said it expects to make just two 25 basis point cuts in 2025, half a percentage point less than its September forecast for the first year of the new Trump administration. Even with the recent declines, the S&P 500 is up 23% on the year, with the Dow up more than 12% and the Nasdaq up 29%. Traders now see just one quarter-point rate reduction by mid-2025, and see less than two cuts in total by the end of the year, compared with last week's expectations of three rate cuts. Longer-dated Treasury yields were higher after the economic data, with the benchmark 10-year note reaching a near 7-month high of 4.594%. The CBOE volatility index, Wall Street's fear gauge, eased to close at 24.09 after closing at a 5-1/2-month high of 27.62 a day earlier. Bank stocks advanced 0.3% as a rise in yields tends to improve the profitability of lenders, while the incoming Trump administration is expected to loosen regulations on the sector.Declining issues outnumbered advancers by a

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