Global Markets Tumble Amid Fed's Rate Cut Uncertainty

Asian stocks plummeted following hawkish remarks from Federal Reserve officials dampening hopes for a U.S. interest rate cut. The fallout impacted bonds, the dollar, and gold. Wall Street faced heavy losses, particularly in AI stocks, as investors recalibrated expectations for December's rate decision amid rising global economic uncertainty.

Global markets experienced a sharp selloff on Friday as hawkish statements from Federal Reserve officials extinguished optimism for a U.S. rate cut next month. This prompted declines in Asian stocks and reverberated across bonds, the dollar, and gold.

The impact was significant in the Asian market, with Japan's Nikkei dropping 1.8%, Australia's resource-heavy shares declining 1.5%, and South Korea facing a 2.3% loss. Investors were wary after weak lending data from China and awaited key economic updates from the U.S. Bureau of Labor Statistics.

On Wall Street, AI heavyweights like Nvidia suffered sharp losses due to valuation concerns. Federal Reserve officials expressed caution over further rate cuts, citing high inflation, leading to two-year Treasury yields reaching 3.597% as investor bets for next month's rate cut were reduced.

(With inputs from agencies.)