Market Reaction to Fed Rate Cut

The Federal Reserve announced a 25 basis point cut to its overnight borrowing rate, bringing it to a range of 4.25%. While this move was anticipated, the market was caught off guard by the Fed's hawkish statements, indicating that they might not cut rates as significantly in the future. This led to a dramatic drop in the Dow, which fell over 1,100 points, marking its longest losing streak since 1974. The comparison to past economic cycles, particularly the financial turmoil of 2007, raises concerns about market stability and the implications of a tightening monetary policy.