Global markets faced broad-based selling pressure on Tuesday, with U.S. stock futures extending losses and cryptocurrencies remaining under pressure. Investors retreated from risk assets ahead of key events like NVIDIA's earnings and U.S. jobs data, driven by persistent concerns over interest rate outlooks and tech valuations. In Asia-Pacific markets, Japan suffered a triple whammy in stocks, bonds, and currency as worries over government spending intensified, while tech selloffs and geopolitical factors further weighed on sentiment.
**Key Market Moves:** - Nasdaq 100 futures fell 1%, Dow futures dropped 0.5%, and S&P 500 futures declined 0.7%. - Japan’s Nikkei 225 plunged over 3%, while the TOPIX index slid 2.4%. - The MSCI Asia-Pacific Index dropped 2% to 221.28, breaching its 50-day moving average for the first time since April. - South Korea’s KOSPI tumbled more than 3%. - Spot gold dipped to $4,005.03, and silver lost over 1%. - Bitcoin fell below $90,000, and Ethereum dropped under $3,000.
In Japan, the yen weakened to 155.37 per dollar, its lowest since January, while the euro/yen rate breached 180—a record low since the euro’s inception in 1999. Japanese government bond yields rose, with the 10-year yield hitting 1.754%, the highest since June 2008.
Tomo Kinoshita, a global market strategist at Invesco, noted that concerns over government spending and tech declines converged to hammer Japanese markets. Geopolitical risks and doubts about new stimulus measures may further erode foreign investor confidence, which has been a key driver of Japan’s stock rally.
Speculation is mounting that Japan’s potential large-scale stimulus under the Hayashi administration could worsen debt burdens and delay Bank of Japan rate hikes. Investors are closely watching a meeting between Hayashi and BOJ Governor Kazuo Ueda for policy clues.
The selloff reflects lingering worries over rate trajectories and tech valuations. NVIDIA’s earnings on Wednesday will test AI sector valuations, while Thursday’s U.S. jobs report may shape Fed policy expectations.
Hebe Chen of Vantage Markets said, "This is a broad, uneasy selloff triggered by collapsing visibility. The flight from Bitcoin to high-flying tech stocks shows defensive instincts against ‘unknown unknowns.’ Volatility remains the baseline until clarity emerges."
Fed officials’ mixed signals added to uncertainty. Vice Chair Philip Jefferson flagged labor market risks but urged caution, while Governor Christopher Waller backed a December rate cut citing weak jobs data. Traders now price in a 40% chance of a Fed cut next month.
Pepperstone’s Dilin Wu noted, "Fed officials continue to voice inflation concerns, with the data vacuum making it hard to gauge economic momentum."
**Technical Warnings:** S&P 500 has fallen 3.2% from its October 28 peak, breaking below its 50-day moving average for the first time in 139 sessions. Analysts warn of a potential 10% correction.
John Roque of 22V Research highlighted "ugly" signals in the Nasdaq, where stocks hitting 52-week lows outnumbered new highs—a sign of internal weakness.
Bitcoin’s slide below $90,000 marked a seven-month low, erasing its 2025 gains and hurting crypto sentiment. Ethereum fell 0.9% to $2,978.73.
Homin Lee of Lombard Odier said crypto volatility is spilling into other risk assets, with Fed rate recalibration adding tension. "This anxiety may persist until the jobs report offers clarity. Weak labor data or a strong NVIDIA beat could help."
