Asian markets slumped sharply on Friday as investors reacted nervously to mixed US labour data that offered little clarity on the Federal Reserve’s interest-rate path. The disappointing global sentiment wiped out the brief optimism triggered by Nvidia’s strong earnings, sending technology stocks into a fresh tailspin.
Major indices across the region plunged in early trade. Japan’s Nikkei 225 dropped nearly 2%, Australia’s resource-heavy benchmark fell 1.4%, and South Korea’s markets led declines with a steep 4% slide, extending the global risk-off mood.
The sell-off followed a volatile overnight session on Wall Street, where concerns about stretched tech valuations resurfaced. Despite Nvidia’s upbeat outlook, the Nasdaq recorded its widest single-day swing since April 9, when shock tariff announcements roiled investor sentiment.
US Jobs Data Adds to Uncertainty
The latest US jobs report showed stronger-than-expected hiring in September. However, a rise in the unemployment rate and downward revisions to previous months created a confusing backdrop for policymakers weighing a possible December rate cut.
Treasury yields eased as traders increased the probability of a December policy cut to 40% from 30% a day earlier. But with the next employment report scheduled after the Fed’s upcoming meeting, markets remain unconvinced about the likelihood of an immediate move.
Analysts say the data did little to anchor expectations.
“Markets had reasons to cheer — Nvidia impressed, and the jobs data wasn’t alarming. But the rally lacked conviction, and the broader bearish sentiment hasn’t gone away,”
said Kyle Rodda, Senior Analyst at Capital.com.
Fed Officials Grow Cautious
US central bankers have begun expressing heightened concerns about financial stability, warning that cutting rates too aggressively could trigger a disorderly correction in asset prices.
Cleveland Fed President Beth Hammack flagged economic risks linked to early cuts.
Fed Governor Lisa Cook highlighted vulnerabilities that could lead to sharp market drops.
As uncertainty grows, investors continue to reassess risk across global markets.
Currency Market: Dollar Strengthens
The US dollar gained ground, especially against commodity-linked currencies.
Hit a three-month high against the Australian dollar
Reached a seven-month peak versus the New Zealand dollar
Held steady around 157.50 yen, just shy of a new 10-month high
Traders remain alert for possible intervention from Tokyo as the yen’s slide becomes more pronounced.
Fresh data showed Japan’s core inflation at 3% in October, supporting expectations of a near-term rate hike. However, optimism around a large stimulus plan — valued at over ¥20 trillion, the biggest package since COVID-19 — weakened the currency.
Bond Market: Yields Slip
US Treasuries rose modestly on Thursday:
Two-year yield at 3.545%, down 1 bps
Ten-year yield steady near 4.092%
The moves reflected rising bets on a potential December rate cut, though conviction remains low.
Commodities: Oil Drops, Gold Steady
Oil prices retreated in early Asian trade:
WTI crude slipped 0.9% to $58.47
Down 2.7% so far this week
Gold prices remained largely unchanged at $4,077 per ounce, with investors adopting a wait-and-watch stance ahead of further macro signals.
