Markets Crack as Fed Cut Hopes Fade; Asia Hit Hard by Weak China Data

Global markets faced heavy selling pressure on Friday as fading expectations for an imminent Federal Reserve rate cut collided with deteriorating economic signals out of China. U.S. equities opened sharply lower, while Asian markets suffered some of their steepest declines in weeks, reflecting a broad pullback in risk appetite.

In the U.S., traders pared back bets on near-term easing after recent Fed commentary suggested policymakers are unwilling to commit to a December cut without the official economic data still delayed by the government shutdown. Rising Treasury yields added further strain to tech and growth names, intensifying intraday volatility and driving major indices deeper into the red.

Asian equity markets saw an even more pronounced rout. China’s latest manufacturing and services readings came in weaker than expected, amplifying concerns about a slowing recovery and softening demand across the region. The sell-off spread quickly to Japan, South Korea, and Australia, where export-heavy sectors and semiconductor stocks bore the brunt of the downturn.

European markets also followed the global trend lower, pressured by risk aversion and renewed uncertainty around monetary-policy timelines.

With macro visibility still clouded and rate-cut expectations resetting, markets may remain vulnerable to outsized moves. The combination of missing U.S. data, cautious central bank messaging, and weak economic signals from China leaves traders navigating a difficult landscape — one where sentiment can shift rapidly, and volatility is likely to stay elevated.