The Dow plummeted 1,123.03 points (2.6%) to 42,326.87, the Nasdaq dove 716.37 points (3.6%) to 19,392.69 and the S&P 500 plunged 178.45 points (3%) to 5,872.16.

The Fed cut interest rates by 0.25% to 4.25-4.50%, reducing expectations from four to two potential cuts in 2025. Inflation projections were revised upward to 2.5%, with Chair Powell emphasizing cautious future rate reductions. The decision wasn't unanimous, with one Fed president preferring to hold rates steady and the next meeting in January is likely to maintain current rates.

Gold stocks moved sharply lower, dragging the NYSE Arca Gold Bugs Index down by 4.6%. Financial stocks saw substantial weakness with the KBW Bank Index and the NYSE Arca Broker/Dealer Index plunging by 4.3% and 4.2%. Interest rate-sensitive commercial real estate stocks also saw considerable weakness, resulting in a 4% nosedive by the Dow Jones U.S. Real Estate Index. Software, housing, semiconductor and steel stocks moved significantly downwards.

Asia-Pacific stocks turned in a mixed performance. Japan's Nikkei 225 Index slumped by 0.7%, China's Shanghai Composite Index climbed by 0.6%. European stocks saw modest strength on the day. The French CAC 40 Index rose by 0.3% and the U.K.'s FTSE 100 Index inched up by 0.1%, although the German DAX Index closed just below the unchanged line.

In the bond market, treasuries moved sharply lower in reaction to the Fed's revised rate cut forecast. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, surged 10.9 bps to 4.49%.

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