04:58 PM EST, 12/18/2024 (MT Newswires) -- US benchmark equity indexes slumped Wednesday, while Treasury yields soared after the Federal Reserve reduced its policy rate by 25 basis points and flagged fewer cuts ahead than previously projected.

The Nasdaq Composite sank 3.6% to 19,392.7, while the S&P 500 lost 3% to 5,872.2. The Dow Jones Industrial Average declined 2.6% to 42,326.9, marking a 10-day losing streak that is the longest since 1974, according to media reports. All sectors closed lower, led by consumer discretionary's 4.7% plunge.

The central bank's Federal Open Market Committee cut interest rates to a range of 4.25% to 4.50%, in line with Wall Street's expectations.

"With today's action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive," Fed Chair Jerome Powell said in a press conference following the FOMC's meeting. "We can therefore be more cautious as we consider further adjustments to our policy rate."

The FOMC's updated Summary of Economic Projections showed that members raised their median federal funds rate outlook for 2025 to 3.9% from 3.4% projected in September. The rate projection was increased to 3.4% from 2.9% for 2026 and to 3.1% from 2.9% for 2027.

"While we don't think investors should rule out a January cut completely, with the Fed's preferred inflation rate stuck at 2.8% year-on-year, and expectations that (President-elect Donald Trump) will follow through on his inflationary political strategy, it makes sense that the Fed will be much more cautious come the New Year," TD Economics said.

The US 10-year yield surged 12.9 basis points to 4.51% Wednesday, while the two-year rate jumped 11.6 basis points to 4.35%.

In economic news, US housing starts posted a surprise drop last month due to a sharp decline in multi-family projects, government data showed.

Mortgage applications in the US declined for the first time in five weeks as rates across all loan types increased, the Mortgage Bankers Association said.

West Texas Intermediate crude oil was little changed at $70.08 a barrel Wednesday.

In company news, electric vehicle maker Tesla's (TSLA) shares dropped 8.3%, the second-steepest decline on the S&P 500 and the Nasdaq.

Toro (TTC) laid out a fiscal 2025 bottom-line outlook that fell short of analysts' estimates as the company's fourth-quarter sales came in lower than expected, while earnings met market projections. Shares of the lawn mowers and golf equipment manufacturer declined 4.5%.

Jabil ( JBL ) shares jumped 7.3%, the top gainer on the S&P 500, after the manufacturing solutions provider reported smaller-than-expected declines in fiscal first-quarter results while raising its 2025 outlook.

Gold dropped 2.2% to $2,603 per troy ounce, while silver slumped 3.6% to $29.80 per ounce.