The News

The Dow Jones Industrial Average ended the day down about 1,123 points, or 2.6%, after the Fed indicated in a policy statement that it is forecasting just two interest rate cuts in 2025, not the previously projected four. The Fed now anticipates inflation will remain stubbornly above its target range for longer than it had initially expected.

Until Wednesday’s plunge, the Dow had fallen as the broader markets remained strong. The Dow has lost less than 6% in its long losing streak, a relative blip. Other indexes have been at or near record highs, before falling sharply Wednesday. The S&P 500 fell 3% and the Nasdaq Composite index fell 3.6%.

Investors expected the Fed to cut rates by a quarter point Wednesday, which is exactly what the central bank did. But markets tumbled after the Fed’s statement that it is expecting just two rate cuts in 2025 — a signal that monetary conditions will remain tight. Stocks and bonds declined in response to the Fed’s “hawkish cut,” Jay Hatfield, the CEO and CIO at Infrastructure Capital Advisors, said.

On Tuesday, investors priced in a 98% chance the Fed would cut rates at its January meeting. But after Fed Chair Jerome Powell’s press conference wrapped on Wednesday, traders priced in just a 6% chance that the central bank would lower rates at next month’s meeting,

The market was underwhelmed by the likely future path of interest rates,” said Chris Zaccarelli, CIO at Northlight Asset Management.

UnitedHealth Group’s 15% decline this month has dragged the Dow, in particular, lower. The insurance giant’s selloff began after the fatal shooting of UnitedHealthcare CEO Brian Thompson. Ironically, UnitedHealth was about 3.3% higher Wednesday.

Nvidia, the US chipmaker that joined the Dow in November, has also dragged the 30-stock index lower. While Nvidia’s stock is up over 180% this year, it has fallen in the past month, down about 5% and contributing to the Dow’s decline.

Despite the long slide, the Dow remains 14% higher this year, up more than 5,000 points in 2024.

Markets initially surged following the election results, with investors breathing a sigh of relief that recounts and court fights were avoided. There has also been significant enthusiasm for Trump’s promises to cut red tape and taxes.

 according to fed funds futures data.

Why has California declared a bird flu emergency?

The emergency declaration on Wednesday was made after several more dairy cows tested positive for the virus in southern California.

Newsom said declaring a state of emergency would make funds available to “streamline and expedite” efforts to tackle an outbreak.

Since bird flu was detected in dairy farms in the United States in 2022, it has spread to hundreds of herds of cattle in 16 US states and caused infections in some dairy farm workers – all of which have been mild so far.

However, on Wednesday, the first severe illness from the H5N1 strain of the virus in a human was reported in Louisiana.

The 65-year-old, who is understood to have underlying health conditions, has been hospitalised and is in critical condition, according to the Centers for Disease Control and Prevention (CDC).

CDC confirms first severe case of H5N1 Bird Flu in the US. While an investigation into the source of the infection is ongoing, it has been determined that the patient had exposure to sick and dead birds in back yard flocks,” the agency said.

The H5N1 strain was first detected in the US in March this year. Since then, 61 people in seven states have been reported to have contracted the virus. Most of them have suffered only mild symptoms, and 34 of them are in California.

While the detection of bird flu in humans has historically been rare, more and more humans are testing positive for the virus in recent years, especially in North America.

Before 2022, human cases of bird flu had not been reported in the US at all. In 2022, only one human case of bird flu had been detected in the US and no human cases were detected in 2023.

On November 9, Canada reported its first human case of H5N1 in a teenager in the British Columbia province.

What is bird flu?

Bird flu, or avian influenza, is a virus that typically spreads among birds but can also affect humans and other animals, including dairy cows, seals, cats, dogs, foxes, skunks, tigers, leopards and farmed mink, according to the CDC. So far, there have been no cases of bird flu passing from one human to another.