US stock futures steady after Wall St tumbles on prospect of fewer Fed rate cuts

U.S. stock index futures steadied on Wednesday evening after a sharp fall on Wall Street as the Federal Reserve lowered interest rates as expected but indicated a slower pace of easing in 2025.

Federal Reserve officials lowered interest rates for the third time in a row on Wednesday but projected fewer cuts in 2025 amid sticky inflation and resilient economic growth.

S&P 500 Futures were largely unchanged at 5,941.0 points, while Nasdaq 100 Futures inched lower to 21,475.25 points by 19:18 ET (00:18 GMT). Dow Jones Futures were marginally higher at 42,827.0 points.

Fed officials project only two more cuts in 2025
The Fed cut interest rates by 25 basis points at the end of its two-day meeting on Wednesday, bringing down the borrowing rate to a range of 4.25%-4.50%.

Chair Jerome Powell emphasized that further reductions depend on progress in curbing persistent inflation, reflecting policymakers’ adjustments to potential economic shifts under the incoming Donald Trump administration.

Policymakers now see the benchmark rate falling to 3.9% for next year, suggesting just two 25 bps rate cuts, compared with a prior forecast in September for four cuts.

The Federal Open Market Committee (FOMC) economic projections showed that inflation was still a long way from its 2% target, with the targeted metric expected to end this year at 2.4% and at 2.5% next year.

It also showed that policymakers now expect slightly higher economic growth and lower unemployment next year compared to their projections three months ago.

Wall St slumps with tech logging heavy losses

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The prospect of interest rates remaining higher for longer than expected sent Wall Street indexes sharply lower on Wednesday, with heavy losses in the technology sector. Investors also locked-in recent profits in tech stocks, after they rallied sharply over the past week.

Market darling NVIDIA Corporation (NASDAQ:NVDA) fell more than 1%, sinking deeper into correction territory following a 10% plunge from its recent peak.

Tesla Inc (NASDAQ:TSLA) slumped more than 8%, and Intel Corporation (NASDAQ:INTC) lost nearly 6%, while Broadcom Inc (NASDAQ:AVGO) shares plunged 7% on Wednesday.

In the aftermarket trade, Micron Technology Inc (NASDAQ:MU) shares plunged nearly 16% after the company issued a revenue outlook that came in below analysts’ expectations.

The S&P 500 declined 3% to 5,872.16 points, while the NASDAQ Composite fell 3.6% to 19,380.87 points.

The Dow Jones Industrial Average fell 2.6% to 42,326.87 points, its 10th consecutive session of declines, marking its longest losing streak since 1974.