A cut now, but fewer ahead
The U.S. Federal Reserve lowered interest rates by 25 basis points on Wednesday, taking its overnight borrowing rate to a target range of 4.25%-4.5%. In the Fed's dot plot indicating expectations for rates in the years ahead, the central bank mostly indicated just two rate reductions for 2025, fewer than the four cuts previously projected in September.
Sharp sell-off in markets
U.S. markets sold off sharply on Wednesday. The Dow Jones Industrial Average lost more than 1,000 points, dropping 2.58% for its 10th straight day of losses. The S&P 500 retreated 2.95% and the Nasdaq Composite sank 3.56%. The pan-European Stoxx 600 -- which ended trading before the Fed's decision -- added 0.15%.
Shares of Tesla reverse
Tesla shares slumped 8.3% Wednesday, their steepest fall since Donald Trump won the U.S. presidential elections in November, amid heavy losses in the broader market. While shares are still up 75% since the elections on Nov. 5, the company's stock seems "widely disconnected ... from fundamentals," Barclay analysts wrote in a report on Wednesday.
Disappointing guidance from Micron
Shares of Micron plunged more than 15% in extended trading after the company gave substantially weaker-than-expected guidance, even though it beat expectations on earnings for its last quarter. For the current quarter, Micron expects revenue to come in around $7.9 billion. That's far less than the $8.98 billion expected by analysts, according to LSEG.
[PRO] Why markets were so disappointed
The stock market took a battering after digesting the Fed's forecast that monetary policy in 2025 will remain tighter than previously forecast. CNBC's Sarah Min looks at why investors were so disappointed, and what market observers think about the Fed's decision.