Stocks fall sharply after the Federal reserve hints at just 2 rate cuts for ’25

U.S. stocks tumbled to one of their worst days of the year after the Federal Reserve hinted Wednesday it may deliver fewer shots of adrenaline for the U.S. economy in 2025 than earlier thought.

The S&P 500 fell 2.9%, just shy of its biggest loss for the year, to pull further from its all-time high set a couple weeks ago. The Dow Jones Industrial Average lost 1,123 points, or 2.6%, and the Nasdaq composite dropped 3.6%.

The yield on the 10-year Treasury rose to 4.51% from 4.40% late Tuesday, which is a notable move for the bond market. The two-year yield, which more closely tracks expectations for Fed action, climbed to 4.35% from 4.25%.

Stocks of smaller companies, many of which borrow to fuel their growth, tumbled on Wednesday. The Russell 2000 index of small-cap stocks tumbled 4.4%.

Elsewhere on Wall Street, General Mills dropped 3.1% despite reporting a stronger profit for the latest quarter than expected. The maker of Progresso soups and Cheerios said it will increase its investments in brands to help them grow, which pushed it to cut its forecast for profit this fiscal year.

CTA still in play for small business

Small business owners should not forget about a rule — currently in legal limbo — that would require them to register with an agency called the Financial Crimes Enforcement Network, or FinCEN, by Jan. 1.

The registration is part of the Corporate Transparency Act, an anti-money laundering statue passed in 2021. Under the CTA, the owners and part-owners of an estimated 32.6 million small businesses must register personal information with FinCEN, such as a photo ID and home address.

Registering isn’t difficult, but if a small business owner is unaware of the requirement, they could be slapped with penalties of up to $10,000. Businesses with more than 20 employees and more than $5 million in sales can qualify for exemptions.

For now, the rule is on hold. On Dec. 3, a federal court in Texas issued a preliminary injunction prohibiting enforcement of the rule. FinCen has said registering is voluntary. But the injunction could be overturned on appeal, so small business owners should keep an eye on the case.

The act was intended to get a look inside shell companies and crack down on attempts by “criminals, organized crime rings, and other illicit actors to hide their identities and launder their money through the financial system,” Treasury Secretary Janet Yellen said in 2022.

ATT, Sweetgreen demand more office days

AT&T and Sweetgreen have told non-frontline staff to get back to their desks more often come January.

The telecom giant will require more U.S. corporate employees to be in the office five days a week. The salad chain is moving to four days for the few hundred support staffers who don’t work at its restaurants. While specifics often vary by location and business unit, the impacted workers at both companies currently come in about three days a week.

The fresh mandates follow a decree from Amazon.com, whose CEO told corporate employees in September that a shift to five days in the office in 2025 would strengthen collaboration, connections and its overall culture.

Compiled from Associated Press and Bloomberg reports.