Wall Street stocks faced a volatile session on Friday, but within a range, as rising hopes that the Federal Reserve will cut interest rates in December were offset by lingering concerns about lofty valuations in the technology sector.
The Nasdaq index, full of technology stocks, lost 0.38%, while the S&P 500 improved slightly and the Dow Jones Industrial Average gained almost 0.5%. US Treasury yields were falling, the dollar was stable and Bitcoin was plummeting.
Capping off a hectic week, US and global stock markets were on track to finish below last Friday’s closewith the S&P 500 and Nasdaq on track to post their biggest weekly percentage loss since U.S. President Donald Trump rocked markets with his major tariff announcement in April.
Strong gains in the artificial intelligence sector, especially from chipmaker Nvidiathey only momentarily quelled growing concerns that technology stocks are overvalued and on the verge of a correction.
The Fed, deprived of official economic data during the just-ended government shutdown, finally got a look at the state of the labor market on Thursdaywhich showed an unexpected increase in the unemployment rate.
Financial markets now see more likelihood of a third and final rate cut this year by the Fed. CME’s FedWatch tool puts the chance at 73.3%, a significant increase from 39.1% on Thursday.
The pan-European STOXX 600 index fell 0.36%, affected by renewed concerns about technology company valuations. Msci’s global stock measure lost 4.07 points, or 0.42%, to 964.46 units.
Emerging market values fell 2.81%, to 1,333.04 points. MSCI’s broadest index of Asia-Pacific shares excluding Japan fell 2.83% to 684.69, while Japan’s Nikkei .N225 fell 2.4% to 48,625.88.
The dollar index, which compares the greenback with a basket of six major currencies, rose 0.12%, to 100.28 unitsand the euro EUR= fell 0.22%, to US$1.1502. Against the yen, the US currency weakened 0.73%, to 156.33 units.
Cryptocurrencies were trading at multi-month lows amid a widespread flight from riskier assets. Bitcoin lost 5.08%, to US$82,789.98, and Ethereum lost 6.44%, to US$2,692.87.
The yield on US 10-year bonds fell 3.9 basis points to 4.065%; that of 30-year notes fell 1.2 basis points, to 4.7199%; and that of two-year papers, which usually moves at the pace of the Fed’s rate expectations, declined 5.3 basis points, to 3.505%.
Oil prices LCOc1 fall for the third consecutive day, leaving around 2%amid pressure from the United States to achieve an agreement between Russia and Ukraine.
Gold trimmed earlier losses as the odds of a rate cut in December increased. Spot gold fell 0.31% to US$4,040.59 an ounce, and US gold futures GCc1 gained 0.35% to US$4,070.9.
