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On Wednesday, the Fed took a significant step by lowering interest rates by 25 basis points. This move initially had an impact on the major indexes. The S&P 500 Futures inched 0.2% lower to 5,922.0 points, while the Nasdaq 100 Futures fell 0.3% to 21,312.55 points by 19:39 ET (00:39 GMT). The Dow Jones Futures also edged 0.2% lower to 42,709.0 points.

Impact on Borrowing Rates and Policy Forecasts

The Fed's cut brought the borrowing rate down to a range of 4.25%-4.50%. However, policymakers' forecast of just two rate cuts in 2025, compared to the previous forecast of four cuts, led to a sharp reaction in the markets. Chair Jerome Powell emphasized that further reductions depend on progress in curbing persistent inflation, highlighting the policymakers' adjustments in response to potential economic shifts under the incoming Donald Trump administration.Traders now expect only a single quarter-point reduction in 2025 due to the continued economic resilience and still-elevated inflation. This shift in expectations has had a profound effect on market sentiment.

Initial Jobless Claims and Economic Growth

Data on Thursday showed that initial jobless claims fell more than expected last week, indicating a gradual labor market slowdown. This comes at a time when other data revealed that the U.S. economy grew at a faster pace than previously estimated in the third quarter. This backs the Fed's view of resilient economic growth.Wall Street indexes initially rebounded on Thursday following a slump on Wednesday but closed largely unchanged. Investors were still assessing the implications of the Fed's hawkish tone. The prospects of rates remaining higher for longer than expected had sent Wall Street indexes sharply lower on Wednesday, with heavy losses in the tech sector.

Technology Stocks and Individual Company Performances

Technology stocks managed to cover some of the ground they lost in the previous session but still ended lower. For example, NVIDIA Corporation (NASDAQ:NVDA) stock rose 1.3%, while Tesla Inc (NASDAQ:TSLA) fell nearly 1%, and Intel Corporation (NASDAQ:INTC) lost nearly 1.2%. However, Broadcom Inc (NASDAQ:AVGO) shares fell 2.3% on Thursday.Micron Technology Inc (NASDAQ:MU) shares plunged nearly 17% on Thursday, a day after issuing weaker-than-expected earnings guidance. This shows the sensitivity of individual companies to market conditions and earnings expectations.

Government Shutdown Concerns

On Thursday, the U.S. House of Representatives decisively voted down a Republican-backed funding proposal aimed at preventing a government shutdown. Government funding is due to expire at midnight on Friday. If legislators do not meet the deadline, the government will enter a partial shutdown, disrupting various activities from border security to national parks and halting pay for over 2 million federal employees. A potential shutdown could also have an impact on Christmas travel and other public services.