BANGKOK (AP) — Global markets took a hit on Thursday following a significant selloff in U.S. stocks, as the Federal Reserve's recent signals indicated a potential reduction in the number of interest rate cuts expected for 2025.

As anticipated, the Fed lowered its key interest rate by a quarter of a percentage point, bringing it to a range of 4.25% to 4.5%. Meanwhile, the Bank of England decided to maintain its policy rate, and the Bank of Japan also kept its benchmark rate steady at 0.25%. This stability from the BOJ has led to a surge in the dollar against the Japanese yen, with the currency trading at 157.04 yen—up by 1.5% from the previous day.

Despite the overall decline in world markets, the losses remained relatively moderate, typically below 2%. In early trading across Europe, the FTSE 100 index in the UK decreased by 1.2% to 8,102.36 points, while France's CAC 40 also slipped 1.2% to 7,299.99. Germany's DAX index fell by 1% to 20,045.12.

Looking ahead, futures for the S&P 500 and Dow Jones Industrial Average showed slight optimism, up 0.4% and 0.3%, respectively.

Asian markets were also affected, with Tokyo’s Nikkei 225 dropping 0.7% to 38,813.58. A weaker yen is known to inflate import prices in Japan, raising concerns for the Bank of Japan to consider rate hikes—many analysts anticipate a potential increase in January. However, the BOJ is proceeding cautiously, especially with the uncertainties surrounding economic policies under President-elect Donald Trump, particularly regarding tariffs.

The BOJ stated, “There are high uncertainties surrounding Japan's business outlook and developments in foreign economies and commodity prices.”

Chinese markets mirrored the regional decline, as the Hang Seng index fell 0.6% to 19,752.51, and the Shanghai Composite index dipped 0.4% to 3,370.03. Australia’s S&P/ASX 200 saw a sharper decline, down 1.7% to 8,168.20, while South Korea's Kospi index plummeted 2% to 2,435.93. India’s Sensex saw a decrease of 1.2%, and other Asian markets like Taiwan's Taiex and Bangkok’s SET followed suit with losses of 1% and 1.5%, respectively.

On Wednesday, Wall Street faced a downward spiral, with the S&P 500 index plunging 3%, just shy of its most substantial loss of the year. The Dow Jones experienced a staggering loss of 1,123 points (2.6%), while the Nasdaq composite fell by 3.6%. The Russell 2000 index, which highlights small-cap stocks, was hit particularly hard, tumbling 4.4%.

The recent rate cut marked the third adjustment this year. The Fed began implementing these cuts in September to bolster the labor market. While Wall Street tends to favor low-interest rates, this latest cut was largely factored in, and investor focus has shifted towards anticipated cuts in the upcoming year.

A significant focus remains on the Fed's predictions for future rate changes, especially after recent hints suggested only two cuts in 2025—down from earlier expectations of four. This adjustment has raised questions about the sustainability of the bullish trend that has seen the U.S. stock market reach all-time highs a staggering 57 times so far in 2024.

As global traders weigh these developments, all eyes are now on the Fed’s next moves and how they will impact economic stability worldwide. Will the markets bounce back, or is a larger downturn looming? Only time will tell!