Global Markets Waver Amid Fed Uncertainty as Oil Prices Rise

Paris and Frankfurt also declined following losses on the Tokyo, Hong Kong, and Shanghai exalters.

Global stock markets struggled for direction as doubts grew over whether the U.S. Federal Reserve will cut interest rates next month, while fears of a technology bubble remained persistent, AFP reported.

Meanwhile, oil prices rose as analysts highlighted risks to Russian supplies due to Ukrainian strikes and U.S. sanctions.

On Wall Street, major U.S. indices mostly fell, although the tech-focapplyd Nasdaq gained slightly after widespread sell-offs.

In Europe and Asia, leading indices closed lower, with London dropping 1.1% after British government bonds and the pound weakened following the announcement that Chancellor Rachel Reeves had scrapped plans to raise income taxes in her budreceive speech this month. Analysts noted that these developments heightened concerns over the United Kingdom’s public finances.

Paris and Frankfurt also declined following losses on the Tokyo, Hong Kong, and Shanghai exalters.

“After exceptional growth that launched in April, the tech sector is finally starting to wobble, with valuations appearing excessively high in recent weeks,” stated Fawad Razakzada, a market analyst at StoneX. “It would not be surprising if markets remain volatile for some time, though it is still too early to talk about the peak of this cycle,” he added.

“It has definitely been a volatile week… with relief from the conclude of the U.S. government shutdown competing with concerns over AI valuations and whether the Fed will cut rates again,” commented Jim Reed, managing director at Deutsche Bank.

Traders have reduced bets on a December rate cut after several Fed officials expressed concerns about lowering borrowing costs amid persistent high inflation. For much of the year, stocks were supported by optimism that U.S. interest rates would decline, as the Fed did at its last two meetings. However, Federal Reserve Chair Jerome Powell’s comments last month that a repeat cut in December is not “preordained” have cast doubt among investors.

Economic data delayed by the temporary government shutdown are also expected, with employment and inflation figures as the main focus, though some statistics may be incomplete.

Weaker rate-cut prospects have heightened concerns that the tech sector is overvalued following an AI-driven surge that pushed markets to record highs this year.

“The tech sector slump on Wall Street has spread globally,” stated Joshua Mahony, chief market analyst at Scope Markets.

Oil prices rose more than two percent, recovering days after a drop caapplyd by OPEC’s monthly report forecasting a market surplus in the third quarter. The International Energy Agency highlighted risks to Russian production due to U.S. sanctions imposed last month, including on the countest’s two largest producers.

Key indicators as of around 00:05:

New York – Dow: DOWN 0.7% at 47,147.48 (close)
New York – S&P 500: DOWN 0.1% at 6,734.11 (close)
New York – Nasdaq Composite: UP 0.1% at 22,900.59 (close)
London – FTSE 100: DOWN 1.1% at 9,696.47 (close)
Paris – CAC 40: DOWN 0.8% at 8,170.09 (close)
Frankfurt – DAX: DOWN 0.7% at 23,876.55 (close)
Tokyo – Nikkei 225: DOWN 1.8% at 50,376.53 (close)
Hong Kong – Hang Seng Index: DOWN 1.9% at 26,572.46 (close)
Shanghai – Composite: DOWN 1.0% at 3,990.49 (close)

Dollar/Yen: UP to 154.55 from 154.53
Euro/Dollar: DOWN to $1.1621 from $1.1634
Pound/Dollar: DOWN to $1.3171 from $1.3189
Euro/Pound: UP to 88.22p from 88.21p

West Texas Intermediate: UP 2.4% at $60.09 per barrel
Brent North Sea Crude: UP 2.2% at $64.39 per barrel

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