A new wave of pressure hit global markets as investors moved away from all types of risk a few days before a "hot" week, which includes Nvidia's results and the crucial US employment announcement.
International stocks moved close to a one-month low, while Asian markets lost 2% and are heading toward a third consecutive day of decline. In the MSCI Asia Pacific index, nearly four stocks fell for every one that rose, with the index dropping below the 50-day moving average for the first time since April—a sign that many investors consider bearish.
Futures for the S&P 500, Nasdaq 100, and European indices indicated further losses, while Bitcoin fell below $90,000 for the first time in seven months. Bonds strengthened, with the yield on the 10-year US Treasury bond falling by three basis points to 4.11%.
The image reflects the uncertainty surrounding interest rates and corporate technology results. Nvidia's report on Wednesday will test investors' nerves, as the high valuations of the artificial intelligence sector continue to cause concern. On Thursday, interest shifts to the delayed September employment report, which will provide clues about the Fed's direction.
"This is the kind of broad, uneasy liquidation that erupts when visibility disappears," Hebe Chen of Vantage Markets in Melbourne told Bloomberg. "The flight from risk—from Bitcoin to high-flying technology—shows the defensive reaction against the 'unknown'."
Alarming signals in S&P 500 and Nasdaq
Technical analysts in the US are sounding the alarm, fearing that the decline could escalate into a correction of over 10%.
The sharp fall of the S&P 500 on Monday brought the total correction from the historical high of October 28 to 3.2%. The index closed below the 50-day moving average for the first time after 139 sessions—the second-longest such streak of the century. The Nasdaq Composite is also emitting "bad" signals, according to John Roque of 22V Research. Now more stocks in the index are moving at 52-week lows than at highs—an internal weakness that complicates the possibility of a new rally.
"It's been a great year for investors, but nerves are starting to fray as we head towards the end of the year," said Nick Twidale of AT Global Markets in Sydney.
Dollar, gold, and Nvidia under the microscope
In other markets, the dollar index maintained its gains, while gold recorded a fourth day of losses, remaining slightly above $4,000 per ounce, as expectations for an interest rate cut by the Fed decrease. Typically, lower interest rates make gold more attractive.
Nvidia shares fell after data showed that Peter Thiel's hedge fund liquidated its position in the company in the third quarter.
Bitcoin: The fall wipes out 2025 gains
Bitcoin's new plunge widened its downward trend over the past month, wiping out its 2025 gains and hitting sentiment in the digital asset market.
"Volatility in crypto is spilling over into other risky assets," said Homin Lee of Lombard Odier. "Nervousness will persist until the employment report, which might give a clearer signal. A weak labor report or strong earnings from Nvidia would help."
Fed: Uncertainty about interest rate cuts
The possibility of interest rate cuts remains the second major factor of uncertainty. Fed Vice Chairman Philip Jefferson warned that the risks to the labor market are now downward, but stressed that moves must be made carefully. Christopher Waller supports a cut in December due to weak employment data.
Markets are pricing in about a 40% probability of an interest rate cut next month.
"Fed officials continue to express concern about persistent inflationary pressure, emphasizing that the information gap makes it difficult to correctly estimate the economy's true momentum," noted Dilin Wu of Pepperstone.
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