Global markets are experiencing a significant downturn after a tech sector sell-off and concerns over China's economic slowdown. The impact was most pronounced in London, where the FTSE 100 index plummeted by 1.1% to close at 9,698 points, with banking stocks taking a hit. The pound also fell against the dollar as investors digested news that Chancellor Rachel Reeves had abandoned plans to raise income tax rates.
The tech-heavy Nasdaq Composite initially fell by as much as 1.8%, but recovered to close flat, while the Dow Jones industrial average declined by 0.7%. Markets across Europe also slid on opening, with the Stoxx 600 falling 0.9% and France's Cac 40 dropping 0.54%.
The decline in global markets has been fueled by concerns over China's economic slowdown, which saw fixed-asset investment shrink 1.7% in the first 10 months of the year, according to official data. The CSI 300 index fell 0.7%, while Hong Kong's Hang Seng dropped 0.9%. Taiwan's Taiex slumped by 1.4%.
Investors are also nervous about the impact on the US economy of the longest federal government shutdown in history, which has forced officials to delay releasing data on inflation and jobs. A growing number of officials have signalled caution over the prospects of a US rate cut next month.
The sell-off in technology stocks has been particularly severe, with Nvidia leading the way as it fell 3.6% after SoftBank sold its entire stake in the company. Other chipmakers, such as SK Hynix and Samsung Electronics, also took a hit, while Taiwan Semiconductor Manufacturing Company's stock dropped by 1.8%.
Analysts say that the decline in global markets is driven by concerns over AI valuations and whether the Fed will cut rates again next month. "It's certainly been a volatile week in terms of sentiment," said Jim Reid at Deutsche Bank. "The S&P 500 posted its worst day in over a month with a December cut probability falling sharply from about 59% at Wednesday's close to 49% last night."
Meanwhile, the pound fell nearly 0.5% against the dollar, and investors are weighing the potential impact of Reeves' U-turn on raising income tax rates in the budget on November 26.
The tech-heavy Nasdaq Composite initially fell by as much as 1.8%, but recovered to close flat, while the Dow Jones industrial average declined by 0.7%. Markets across Europe also slid on opening, with the Stoxx 600 falling 0.9% and France's Cac 40 dropping 0.54%.
The decline in global markets has been fueled by concerns over China's economic slowdown, which saw fixed-asset investment shrink 1.7% in the first 10 months of the year, according to official data. The CSI 300 index fell 0.7%, while Hong Kong's Hang Seng dropped 0.9%. Taiwan's Taiex slumped by 1.4%.
Investors are also nervous about the impact on the US economy of the longest federal government shutdown in history, which has forced officials to delay releasing data on inflation and jobs. A growing number of officials have signalled caution over the prospects of a US rate cut next month.
The sell-off in technology stocks has been particularly severe, with Nvidia leading the way as it fell 3.6% after SoftBank sold its entire stake in the company. Other chipmakers, such as SK Hynix and Samsung Electronics, also took a hit, while Taiwan Semiconductor Manufacturing Company's stock dropped by 1.8%.
Analysts say that the decline in global markets is driven by concerns over AI valuations and whether the Fed will cut rates again next month. "It's certainly been a volatile week in terms of sentiment," said Jim Reid at Deutsche Bank. "The S&P 500 posted its worst day in over a month with a December cut probability falling sharply from about 59% at Wednesday's close to 49% last night."
Meanwhile, the pound fell nearly 0.5% against the dollar, and investors are weighing the potential impact of Reeves' U-turn on raising income tax rates in the budget on November 26.
think it's just a normal correction after the crazy tech bubble 
but the pound being affected by the UK gov't u turn is weird 
i mean, you'd think income tax rates wouldn't be that big of a deal for investors 
anyway, hope no one lost too much cash in their portfolios 
. I think it's just a case of investors getting spooked about AI valuations and the Fed cutting rates again next month 
. The fact that Nvidia took a hit after SoftBank sold its stake in the company just seems like a coincidence to me 
Plus, I'm still trying to figure out why investors are so worried about the US government shutdown 
. Can't they just release the data already?! 
. The FTSE 100 index plummeting by 1.1%? That's just not surprising at all 
. We've been hearing about China's economic slowdown for months now, so I'm surprised anyone was caught off guard. And another thing, what's up with the pound falling against the dollar?! Can't we just get some stability in our currency market already? 
Global markets: because who doesn't love a good slump? 
Fed rate cuts: the uncertainty is killing us 
Nvidia: leading the way down 
. Anyway, it's good to see the pound isn't getting completely trounced against the dollar 
. Market volatility is always expected, but let's keep things in perspective 
.
Can someone please provide some actual data or studies to back this up? I'm not convinced. Also, why is everyone so obsessed with the pound and its relationship to the dollar? Is that really what's driving the market downturn? 
.
but honestly i think it's just a normal correction 
it's just part of the game now 
and besides, chancellor reeves is actually trying to be a good boss by not raising income tax rates 
so let's not get too worked up about that 
. China's economic slowdown is causing some major jitters, but I think investors are just getting a little too spooked about AI valuations 
can't we just have one stable market for once? 
. i mean, how can we trust any economic data when they're not releasing anything? 
fingers crossed! 
and the tech sector will roar again 
I'm talking about that new foldable phone that everyone's been raving about - is it still gonna come out? 
. After all, we've seen similar corrections in the past and markets tend to be resilient in the long run 
.