Africa-Press – Lesotho. Global markets fell on Friday as fading expectations for a December interest rate cut by the US Federal Reserve and renewed concerns over elevated asset valuations weighed on investor sentiment.
Market focus has sharpened following the end of the longest US government shutdown in history last week. Data released since then showed nonfarm payrolls rising by 119,000 in September, beating forecasts, while the unemployment rate ticked up to 4.4% from 4.3%. Initial jobless claims fell by 8,000 to 220,000 in the week ending Nov. 15.
Analysts said the stronger-than-expected employment figures eased worries about a cooling labor market. The report is also the final jobs release before the Fed’s Federal Open Market Committee meeting on Dec. 9–10.
According to CME FedWatch, traders on Friday priced in a 35.4% chance of a 25-basis-point rate cut in December, down sharply from 63.8% a week earlier.
Fed warns on high asset valuations
Remarks from Fed officials added to the cautious tone. Fed Board Member Lisa Cook said she “wouldn’t be surprised” to see a sharp correction in asset prices from historically high levels.
“Currently, my impression is that there is an increased likelihood of outsized asset price declines,” she said.
US markets, yields retreat
The VIX volatility index jumped about 12% on Thursday to 26.4. The Dow Jones slid 0.84%, the S&P 500 fell 1.56% and the Nasdaq dropped 2.15%, though US futures opened Friday with slight gains.
Tech and semiconductor stocks led the decline after Cook’s comments.
In bond markets, the US 10-year Treasury yield fell for a fifth straight session, easing from 4.17% on Thursday to 4.10%, and standing at 4.09% on Friday.
Europe tracks US downside
European stocks had risen on Thursday on Nvidia’s better-than-expected earnings, but futures turned negative on Friday following the slide in US markets.
On Thursday, London’s FTSE 100 gained 0.21%, Italy’s FTSE MIB rose 0.62%, France’s CAC 40 added 0.34% and Germany’s DAX 40 climbed 0.5%.
Asian tech shares tumble
Asian indices mirrored US selling pressure, led by sharp drops in technology shares.
In Japan, Advantest fell about 12%, Furukawa Electric dropped 11%, Tokyo Electron slipped 7% and Lasertec declined 5%. SoftBank plunged more than 10% after confirming it had sold its entire stake in Nvidia.
In South Korea, SK Hynix tumbled over 8%, while Samsung Electronics shed 6%.
The Nikkei 225 lost 2.2%, South Korea’s Kospi fell 3.7%, Hong Kong’s Hang Seng slid 1.6% and China’s Shanghai Composite was down 1.4% near the close.
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