As US jobs fail to meet the rate projection, Asian stocks plummet, and tech is battered

Asian stocks continued their worldwide rampage on Friday as investors resumed selling riskier assets despite Nvidia’s impressive earnings, as the highly anticipated U.S. jobs data failed to provide clarity on interest rates.

The Nikkei (.N225) in Japan fell 2% on Friday, Australia’s resource-heavy shares (.AXJO) down 1.4%, and South Korea (.KS11) fell nearly 4%.

The Nasdaq saw its worst one-day swing since April 9, when President Donald Trump’s “Liberation Day” tariffs alarmed markets. Wall Street plummeted overnight as concerns over soaring tech stock prices reappeared following a brief reprieve from Nvidia’s impressive projections.

Data indicated that the U.S. economy created more jobs in September than anticipated, but the Federal Reserve faces a murky picture as it evaluates whether to lower interest rates next month to support the labor market due to an increase in the unemployment rate and regressions to earlier months.

Treasury yields dropped as futures moved to suggest a 40% chance of a U.S. rate decrease in December, up from 30% the day before. However, this was still insufficient to persuade investors of a December move, given the next payroll figures won’t be available until after the Fed meeting.

Wall Street exploded out of the gates at first thanks to Nvidia’s impressive quarterly earnings, which gave the markets much to cheer about. Kyle Rodda, a senior analyst at Capital.com, stated that the U.S. jobs report was likely as good as one could have asked for as well.

“However, the momentum simply was not there to carry the rally through, with the passing of two critical risk events – both with positive outcomes, no less – not enough to kill the bearishness gripping the markets currently.”

As Fed officials discuss when and even if to further lower interest rates, they are now more concerned about the stability of the financial markets, especially the possibility of a precipitous decline in asset prices.

Beth Hammack, president of the Cleveland Fed, cautioned on Thursday that further rate cuts at this time pose a number of hazards to the economy. There is a chance that asset prices will drop significantly, according to Fed Governor Lisa Cook.

With the risk-sensitive commodities currencies, the dollar surged in the currency markets, reaching a three-month high for the Australian dollar and a new seven-month high for the kiwi.

After reaching a fresh 10-month high of 157.9 yen overnight, it remained stable around 157.50 yen as traders remained acutely aware of potential Japanese government assistance due to the yen’s recent sharp decline.

Japan’s core consumer prices increased by 3% in October, according to data, sustaining expectations of a near-term interest rate increase. But the yen has been depreciated due to the new administration of Japan, which is led by Prime Minister Sanae Takaichi, and its promises of economic stimulation.

The government will on Friday launch the largest economic stimulus program since COVID-19, totaling more than 20 trillion yen.

As bets for a Fed decrease next month increased, treasuries climbed overnight. The yield on the 10-year Treasury was stable at 4.092% after easing 3 basis points overnight, while the yield on the two-year Treasury fell 1 basis point to 3.545% after dropping 4 overnight.

Early in the day, oil prices dropped. After falling 2.7% this week, U.S. West Texas Intermediate crude fell 0.9% to $58.47.

In the course of the day, spot gold prices remained relatively stable at $4,077 per ounce.