why did stock market crash today

Why Did the Stock Market Crash Today ? why did the stock market crash 

The U.S. stock market took a big hit today, December 19, 2024, leaving investors wondering, “What went wrong?” Here’s a simple breakdown of what happened and why it matters.

The Federal Reserve’s Decision

The Federal Reserve, which is like the country's financial manager, announced it would cut interest rates by 0.25%. Lowering rates usually makes borrowing cheaper for businesses and people, which can boost the economy. But this time, the news caused the stock market to drop sharply.

Why Did Investors React Negatively?

The Fed also gave a hint about the future. It said it plans to reduce rates only two more times next year, less than investors had hoped. Many were expecting more cuts to keep the economy growing, so this news made them nervous.

How the Stock Market Reacted

Dow Jones Fell over 1,100 points, marking its longest losing streak since the 1970s.

S&P 500 Dropped nearly 3%, the worst in over a decade after a Fed announcement.

Nasdaq  Slid by 3.6%, a significant loss for tech-heavy stocks.

What About Bonds?

The bond market also got shaken up. The interest rates on 10-year Treasury bonds went up to 4.5%. This happens when people expect inflation or worry about the future economy.

The Fear Factor

A key market fear indicator, the VIX, surged by 74%. A high VIX means people are worried about how things will go in the near future.

Why This Matters to You

A stock market crash can make people nervous about their investments, retirement savings, or even the overall economy. However, this reaction may only last a short time as markets adjust to new information.

Important 💭 things 

While today’s crash feels alarming, it’s important to remember that markets go through ups and downs. The Federal Reserve is trying to balance keeping inflation low and the economy stable. If you’re an investor, staying calm and sticking to your long-term plan is usually the best approach.

Keep an eye on updates, but don’t panic—these events are part of the natural cycle of the financial world.

On December 19, 2024, the U.S. stock market experienced significant declines, with major indices and several prominent companies recording substantial losses.

Major Indices Performance

Dow Jones Industrial Average Dropped over 1,100 points, marking its longest losing streak since the 1970s. 

S&P 500 Fell nearly 3%, experiencing its worst performance on a Federal Reserve decision day in nearly 15 years. 

Nasdaq Composite Declined by 3.6%, falling below the 20,000 mark. 

Notable Company Losses 

Tesla Inc. (TSLA) Shares dropped by 8.28%, closing at $440.13.

Amazon.com Inc. (AMZN) Experienced a 4.63% decline, with shares ending at $220.52.

Alphabet Inc. (GOOGL) Saw a 3.61% decrease, closing at $188.40.

Microsoft Corporation (MSFT) Shares fell by 3.79%, ending the day at $437.39.

Apple Inc. (AAPL) Recorded a 2.18% decline, with shares closing at $248.05.

These declines were influenced by the Federal Reserve's announcement of a 0.25% interest rate cut and projections for only two additional rate cuts in 2025, which fell short of investor expectations.