Global markets retreated on Friday as megacap tech stocks dragged indexes lower and Federal Reserve officials signaled uncertainty about a December rate cut.
⚠️ What’s Driving the Pullback
- Nasdaq is heading toward its longest losing streak since April.
- Dow Jones down 0.6% in early trading.
- FTSE 100 fell over 1%.
- Odds of a December Fed rate cut dropped from 67% → 53% (CME FedWatch).
- AI valuations remain stretched, triggering profit-taking across big tech.
🧠 What Experts Are Saying
Seema Shah – Principal Global Investors
- Labour market is slowing, but the Fed “doesn’t have enough confidence” to cut rates.
- No cut in December would be “quite negative” for markets.
- Still overweight U.S. equities overall.
Bill Fitzpatrick – Logan Capital Management
- Big tech valuations were lofty; recent selling is a natural unwind.
- Rotation into more stable sectors is underway.
- Investors should diversify — “leadership needs to broaden.”
Matthew Pallai – Nomura Capital Management
- Not a bubble, but excess liquidity has pushed valuations high.
- A correction is “healthy,” especially with rising uncertainty around unemployment, tariffs, and geopolitics.
- Dip-buying could push markets to “steamy” levels if it continues unchecked.
📌 What This Means for Investors
- Market sentiment is fragile ahead of the next Fed decision.
- Tech-led volatility may continue as investors reassess valuations.
- Sector rotation could accelerate as defensive names gain traction.
- Short-term weakness, but long-term positioning still favours U.S. equities.