Stock Losses Deepen as Fed Fears Unsettle Traders: Markets Wrap

(Bloomberg) — The selloff in US stocks extended into Friday as fears of a hawkish pivot by the Federal Reserve fueled a retreat from risky assets. UK markets slid 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 0.4%. 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.

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UK gilts sold off after Chancellor of the Exchequer Rachel Reeves scrapped plans to raise income tax rates in the coming budget, prompting questions over how she would offset the revenue shortfall.

The move eased after people familiar said the decision reflected improved economic forecasts, though 10-year yields remained 6 basis points higher at 4.50%. The pound trimmed losses.

Traders slashed the odds of a December US rate cut to below 50% after a string of Fed officials voiced skepticism about the need for a third straight move, citing the economy’s resilience and lingering uncertainty over inflation after the US shutdown. The question remains how the majority of policymakers are leaning, with several still uneasy about signs of labor-market weakness.

Markets had all but priced in a quarter-point reduction less than a month ago. Three Fed official are due to speak Friday, including voting member Jeffrey Schmid.

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 1% as of 9:23 a.m. London time S&P 500 futures fell 0.2% Nasdaq 100 futures fell 0.4% Futures on the Dow Jones Industrial Average were little changed 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 $1.1631 The Japanese yen was little changed at 154.65 per dollar The offshore yuan was little changed at 7.0991 per dollar The British pound fell 0.2% to $1.3161 Cryptocurrencies

Bitcoin fell 1.6% to $97,196.14 Ether rose 0.4% to $3,191.28 Bonds

The yield on 10-year Treasuries was little changed at 4.13% Germany’s 10-year yield advanced two basis points to 2.71% Britain’s 10-year yield advanced six basis points to 4.50% Commodities

Brent crude rose 1.2% to $63.77 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Neil Campling.

©2025 Bloomberg L.P.