Major stock indexes plunged on Wednesday after the Fed signaled a slower pace of rate cuts for 2025 than previously forecast, stressing that it does not expect U.S. inflation to fall below its 2% target before the end of 2026.

The Dow Jones Industrial Average fell more than 1,100 points in its biggest loss since August. The Dow Jones’ 10th straight decline is now approaching its worst losing streak in 50 years.

In particular, the Dow Jones industry index closed with a drop of 1,123.03 points (–2.58%), to 42,326.87 points.

The Nasdaq index, which is dominated by stocks of companies in the technology sector, closed down 716.37 points (–3.56%), at 19,392.69 points.

The broader S&P 500 index, indicative of the general trend, closed down 178.45 points (–2.95%), at 5,872.16 points.

The Fed said it sees just two cuts in its key interest rate next year from the four it forecast just a few months ago. He indicated that he believed inflation would continue to remain above the 2% target until 2026.

In other words, the Fed signaled that interest rates will have to stay higher for longer to maintain the pace of price increases.