Nov. 13 (UPI) — Doubts about a potential third Federal Reserve rate in December triggered an 800-point drop in the Dow Jones Industrial Average on Thursday after setting a record high a day earlier.
The Dow closed higher than 48,000 for the first time on Wednesday, but Investopedia reported a steep decline on Thursday amid concerns over the Federal Reserve rate.
The Dow reached a daily high or 48,211.83 during morning trading on Thursday but declined steadily afterward to a low of 47,431.43 and closed at 47,457.22, which is a drop of 797.60 and 1.65% for the day.
The Nasdaq and S&P 500 likewise posted downturns during the day’s trading, with the Nasdaq closing at 22,870.36, which is a decline of 536.10 and 2.29%.
The S&P 500 dropped by 113.43 and 1.66% when it closed at 6,737.49.
Analysts largely attributed the declines to concerns regarding the Federal Reserve and whether it will approve a third quarter-point rate reduction before the year’s end, according to CNBC.
In October, analysts placed a 95% confidence in a December rate cut, but confidence has declined to about 49% due to a lack of data because of the record 43-day federal government shutdown ended following President Donald Trump’s signing of a funding measure on Wednesday.
The Federal Reserve Open Market Committee is scheduled to meet for two days on Dec. 9 and 10, but committee members have grown more doubtful of another 0.25% rate cut due to the effects of the government shutdown and the president’s often-changing tariff policies.
The current rate is between 3.75% and 4% after the Federal Reserve committee approved a 0.25% rate reduction on Oct. 29.