NEW YORK >> Wall Street closed sharply lower today, with the Dow falling over 1,100 points after the U.S. Federal Reserve delivered a rate cut as expected but signaled it will ease the pace of further cuts in the coming year.

For the Dow it was its tenth consecutive daily loss, marking its longest losing streak since 1974 and its biggest daily percentage decline since early August. The Nasdaq and S&P 500 also logged their largest one-day drops in months.

Benchmark Treasury yields moved higher on the news, and the dollar gained.

“Let’s not forget, you tend to get knee-jerk reactions on Fed Day and then cooler heads prevail the next day,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “The reality is still we have a strong economy and a Fed that is by no means looking to hike any time soon. There are still cuts, likely coming just a little later in 2025.”

As expected, the Federal Open Market Committee cut the Fed funds target rate by 25 basis points at the conclusion of its final policy meeting of 2024.

But the central bank also reduced the number of projected rate cuts in the coming year. The policymakers now expect two interest rate cuts by the end of 2025, down from four in September, and set up the likelihood of a pause in January.

“The Fed didn’t throw any curveballs, right? They cut as expected, and they’re using language hinting at fewer cuts next year and into 2026,” Detrick added. “The market was holding out hope that maybe there’d be a little more dovishness to the statement, but that wasn’t the case.”

In his subsequent press conference, Fed Chair Jerome Powell offered assurances that the economy is strong, inflation has come closer to the 2% goal, and monetary policy is well-positioned to deal with risks.

The Dow Jones Industrial Average fell 1,123.03 points, or 2.58%, to 42,326.87; the S&P 500 fell 178.57 points, or 2.95%, to 5,872.03; and the Nasdaq Composite fell 716.37 points, or 3.56%, to 19,392.69.

Earlier, European shares closed modestly higher, buoyed by technology stocks and French automaker Renault, but gains were held in check ahead of the Fed’s rate decision.

Yields for 10-year U.S. Treasuries gained after the Fed flagged the slower pace of easing.

The yield on benchmark U.S. 10-year notes rose 11.3 basis points to 4.498%, from 4.385% late on Tuesday.

The 30-year bond yield rose 7.3 basis points to 4.6525% from 4.579% late on Tuesday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 10.5 basis points to 4.346%, from 4.241% late on Tuesday.

The dollar extended its gains against a basket of world currencies as investors digested the Fed’s revised outlook.

The dollar index rose 1.09% to 108.09, with the euro down 1.13% at $1.037.

Against the Japanese yen, the dollar strengthened 0.76% to 154.63.

Bitcoin accelerated its losses after Powell said the Fed has no desire to hold the cryptocurrency amid debate over whether the incoming Trump administration might build a bitcoin reserve.

Bitcoin fell 5.17% to $100,916.00. Ethereum declined 6.14% to $3,692.50.

Oil prices settled higher in the wake of the Fed’s decision.

U.S. crude rose 0.71% to settle at $70.58 a barrel, while Brent settled at $73.39 a barrel, up 0.27% on the day.

Gold fell in opposition to the greenback. Spot gold fell 1.94% to $2,594.24 an ounce. U.S. gold futures fell 2.05% to $2,590.20 an ounce.