Stock Selloff Deepens as Fed Fears Rattle Traders: Markets Wrap

(Bloomberg) -- The selloff in US stocks extended into Friday as mounting fears of a hawkish pivot by the Federal Reserve fueled a retreat from risky assets. UK assets were pummeled amid fresh uncertainty over Britain’s fiscal outlook.

Technology stocks were set to be at the forefront of the decline again, with Nasdaq 100 futures slipping 0.6%. The gauge tumbled more than 2% in the previous session as mounting doubts over an interest-rate cut next month stirred fresh jitters about stretched valuations. Bitcoin sank to a six-month low. Treasuries also came under renewed pressure.

Gilts sold off sharply after Chancellor of the Exchequer Rachel Reeves dropped plans to raise headline income tax rates in the coming UK budget, prompting investors to question how she would make up for the revenue shortfall. The pound fell 0.5%, the worst performer among major currencies against the dollar.

Federal Reserve officials’ cautious remarks on policy prospects prompted traders to scale back wagers on a December rate cut, with odds slipping below 50%. Less than a month ago, markets had all but priced in a quarter-point reduction.

Traders also pointed to data showing China’s economic activity cooled more than expected at the start of the fourth quarter, with an unprecedented slump in investment and slower growth in industrial output.

“The nervousness is palpable on markets and it stems from different corners,” said Arnaud Girod, head of economics and cross-asset strategy at Kepler Cheuvreux in Paris. “Any pushback from the Fed on interest rate cuts is bad news. If the Fed hasn’t enough data, they are likely not to cut.”

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.9% as of 8:27 a.m. London time
• S&P 500 futures fell 0.3%
• Nasdaq 100 futures fell 0.5%
• Futures on the Dow Jones Industrial Average fell 0.2%
• The MSCI Asia Pacific Index fell 1.6%
• The MSCI Emerging Markets Index fell 1.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1626
• The Japanese yen was little changed at 154.57 per dollar
• The offshore yuan was little changed at 7.1011 per dollar
• The British pound fell 0.5% to $1.3123

Cryptocurrencies

• Bitcoin fell 1.9% to $96,843.76
• Ether rose 0.4% to $3,190.12

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.13%
• Germany’s 10-year yield advanced two basis points to 2.71%
• Britain’s 10-year yield advanced 10 basis points to 4.54%

Commodities

• Brent crude rose 1.4% to $63.89 a barrel
• Spot gold rose 0.1% to $4,176.38 an ounce

This story was produced with the assistance of Bloomberg Automation.

©2025 Bloomberg L.P.