S&P 500 Gains and Losses Today: Index Drops as Fed Cuts Rates but Signals Caution

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.

Following a series of gains that lifted the semiconductor maker above the $1 trillion market capitalization milestone, Broadcom (AVGO) shares declined for a second straight day, losing 6.9%. Although Broadcom’s AI-driven earnings beat and positive outlook encouraged a slew of research firms to boost their price targets, the recent rally lifted the share price above analysts’ average forecast, suggesting the stock may be fully valued at current levels.

Wednesday’s top performance in the S&P 500 came from shares of circuit board manufacturer Jabil (JBL), which surged 7.3%. The Apple (AAPL) supplier topped sales and profit forecasts for its fiscal first quarter of 2025 and lifted its full-year guidance, pointing to robust demand for its cloud, data center infrastructure, and digital commerce products. Jabil announced a restructuring plan earlier this year that included layoffs and other cost-cutting measures as well as a realignment of its manufacturing capacity.

Shares of several healthcare companies bounced higher on Wednesday, clawing back some of the heavy losses posted in recent sessions as political headwinds against the pharmacy benefit management (PBM) business gathered force. Although the industry has been the subject of bipartisan criticism and could be required to transform its business model, analysts suggested that growth outlook remains healthy. Cigna (CI) shares recovered 6.3%. Shares of UnitedHealth (UNH), Centene (CNC), and CVS Health (CVS) also regained ground.