TLDR
- US stock futures dropped sharply Friday with Nasdaq futures down 1.5% as investors lose confidence in a December Fed rate cut
- Bitcoin fell below $96,000 for the first time in over six months, down more than 20% from its October peak
- Odds of a December quarter-point rate cut have dropped to below 50%, down from 95% probability just one month ago
- Tech stocks led losses with Tesla falling 4% premarket to below $400 and Nvidia down 3% after Thursday’s steep declines
- Fed officials including Minneapolis Fed President Neel Kashkari cite economic resilience and inflation concerns as reasons to pause rate cuts
US stock futures fell sharply on Friday morning as investors braced for another difficult trading session. Dow Jones Industrial Average futures dropped 0.6%, while S&P 500 futures fell close to 1%.
Nasdaq 100 futures tumbled around 1.5%. The losses follow Thursday’s session that saw major indexes log their steepest one-day declines in over a month.
Technology stocks are leading the decline across the board. Tesla shares fell 4% in premarket trading to break below $400, following its worst day since July.
Nvidia shares moved 3% lower after dropping on Thursday. AI concerns are driving investors toward less expensive sectors.
Bitcoin also continued its slide, falling below $96,000 for the first time in over six months. The cryptocurrency has dropped over 20% since its October peak.
The market’s mood has turned negative as worries grow that the Federal Reserve will slow its pace of policy easing. Fed officials have taken an increasingly hawkish tone in recent statements.
Traders now see less than 50% odds of a quarter-point rate cut next month. This represents a sharp drop from about 95% probability just one month ago.
Minneapolis Fed President Neel Kashkari became the latest official to signal caution on rate cuts. He pointed to resilience in the US economy and continued concerns over inflation.
Fed Officials Signal Caution
Policymakers lack clear insight into price pressures and the jobs market. This follows the record six-week federal shutdown that disrupted normal data collection.
Questions remain about what data will be released and in what form. The government has only recently reopened after the extended closure.
President Trump is preparing to make substantial cuts to tariffs to bring down high food costs. Food prices have been a concern for voters in recent state and local elections.
Several trade deals with Argentina, Brazil and other Latin American countries aim to make items like bananas and coffee more affordable. These agreements are expected to reduce import costs for consumers.
Global Markets Follow US Lower
Global equity markets are reflecting the tech-led pressure from Wall Street. Hong Kong’s Hang Seng and Japan’s Nikkei dropped nearly 2% each during Friday trading.
London’s FTSE fell 1% as UK economic data disappointed investors. UK GDP growth slowed to 0.1% in Q3 from the previous quarter.
UK unemployment ticked up to its highest level since early 2021. The labor market data adds to concerns about the British economy.
Oil prices rebounded slightly on renewed geopolitical risks in the Middle East. Energy stocks continue to struggle under the broader risk-off mood and worries about oversupply affecting crude prices.
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