Skip to Main Content

02/02/2024 |

FOMC Decision Sparks Largest 2024 Market Decline

This is an image of Jerome Powell at the FOMC Press Conference.

FOMC Decision Insights

  • Interest Rates: The FOMC announced its decision to maintain the federal funds rate within the current target range of 5.25-5.50%, which initially sent shockwaves through the markets.
  • No Cut In March: Federal Reserve Chairman Jerome Powell’s comments pushed back on the possibility of the central bank initiating rate cuts in March, further contributing to market uncertainty.

The Market’s Reaction

  • S&P 500 Plunge: The S&P 500 saw a substantial drop of around 79 points, equivalent to a 1.6% decline, marking the largest one-day percentage drop since September.
  • Dow Jones Decline: The Dow Jones Industrial Average also suffered, shedding approximately 317 points or 0.8%, representing its most substantial one-day point decline since December.
  • Nasdaq Composite Slump: The Nasdaq Composite took a hit, plummeting around 346 points, or 2.2%, marking its worst performance since October and the most significant Fed Day drop since November 2022.

Additional Factors

Apart from the FOMC decision, other factors played a role in Wednesday’s market turbulence. Lackluster responses to strong earnings from major companies like MSFT and GOOGL, along with renewed concerns about regional banks following New York Community Bancorp‘s dividend cut announcement after reporting a fourth-quarter loss, added to market woes.