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Outside a Tesla showroom in China. Tesla's shares dropped in Wednesday trading.Key Takeaways
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The S&P 500 plunged 3% on Wednesday, Dec. 18, 2024, as the Fed cut interest rates but struck a more cautious tone about future policy moves.
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Shares of cloud-based human resources services provider Paycom plummeted, despite a pair of recent price target boosts.
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Jabil shares surged after the circuit board maker posted better-than-expected quarterly results and raised its full-year guidance.
Major U.S. equities indexes plunged as the Federal Reserve concluded its final policy meeting of the year. The central bank lowered benchmark interest rates by a quarter of a percentage point, as expected, but policymakers suggested that persistent inflation could require a more restrained approach in 2025.
After trading higher for much of the day, the S&P 500 changed course following the rate-cut announcement and as Fed Chair Jerome Powell addressed the press, ending with a daily loss of 3%. The Dow finished the session down 2.6%, extending its streak of down days to double digits for the first time in four decades. The Nasdaq dropped 3.6% as concerns about the interest-rate outlook weighed on the tech sector.
Shares of human resources services provider Paycom Software (PAYC) dropped 10.1% on Wednesday, the most of any S&P 500 constituent. Concerns about cannibalization have weighed on Paycom stock over the past year, with the efficiency of its Beti automated payroll solution reportedly eating into demand for other products and services. Although analysts at Mizuho and Stifel recently lifted their price targets on Paycom stock, both firms' forecasts remain below the current share price.
Tesla (TSLA) shares tumbled 8.3%, retreating from record highs printed in recent sessions in the wake of upgrades by several research firms. Analysts have touted tailwinds for the electric vehicle company's autonomous driving and artificial intelligence initiatives under the incoming presidential administration. The pullback for the stock on Wednesday followed reports that Tesla CEO Elon Musk and his SpaceX business are the subject of federal reviews related to national security concerns.
Shares of BXP (BXP), a real estate investment trust (REIT) focused on premium office properties, fell 7.6%. While the company has seen metrics improve for its markets on the East Coast and in Central Business Districts, underperformance has persisted in West Coast and suburban markets, pointing to an uneven recovery for office real estate that presents a challenge for REITs with geographically diverse workplace property portfolios.