Nasdaq Drops 2.6% as Gold Falls and Fed Hike Looms | Global Economy, Oct 23
Overnight markets weigh a 2.6% Nasdaq drop, a likely December Fed rate rise, French debt risk and Moody's review of France today. The post Nasdaq Drops 2.6% as Gold Falls and Fed Hike Looms | Global Economy, Oct 23 appeared first on The Rio Times .
The Nasdaq experienced a 2.60 percent decline, settling at 26,009, marking a 5.8 percent drop from its October 6 record high. The S&P 500 and Dow Jones both saw modest losses, with the S&P 500 falling 1.21 percent to 7,663 and the Dow gaining only 0.02 percent to 52,868. Gold prices dropped 2.47 percent to US$4,024 per ounce, while the 10-year Treasury yield fell to 4.957 percent.
This shift in the bond market, coupled with the VIX jumping 14.09 percent to 19.03, indicates a growing interest in protective measures against potential downturns. The Federal Reserve is expected to maintain its target range of 3.75 percent to 4.00 percent during their meeting on October 27-28, but many financial institutions anticipate a quarter-point increase in rates by December.
Persistent high inflation, as evidenced by the September CPI at 3.7 percent year on year and the 10-year yield nearing 4.957 percent, prevents the Fed from declaring victory. France's 10-year borrowing costs reached above 5 percent, the highest since July 2002, adding to the overall market uncertainty. Moody's rating review of France's Aa3 rating, set for today, further heightens concerns among European bond investors.
Brazil faces additional challenges with the dollar index at 101.67 and a weakening real currency. A weaker dollar benefits exporters but could trigger capital flight if Treasury yields rise or the Fed tightens monetary policy further. Polymarket prediction data suggests a 93.5 percent probability of a rate hold at the upcoming Federal Reserve meeting on October 27-28, with traders having placed a combined bet of US$57.4 million on this outcome.
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