Valuation, Interest Rate Worries May Lead To Extended Sell-Off On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a sharply lower open on Friday, with stocks likely to extend the sell-off seen over the course of the previous session.

Weakness among technology stocks may continue to weigh on Wall Street amid valuation concerns, as chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) are both tumbling by more than 3 percent in pre-market trading.

Tech heavyweights Palantir Technologies (PLTR) and Tesla (TSLA) are also seeing significant pre-market weakness and are on track for steep losses this week.

"Markets are down across the board as investors fret about cracks in the narrative that's driven the mother of all tech rallies over the past few years," said Dan Coatsworth, head of markets at AJ Bell.

He added, "Investors are worried about rich equity valuations and how billions of dollars are being spent on AI just at a time when the jobs market is looking fragile."

The downward momentum on Wall Street also comes amid concerns about the outlook for interest rates following recent comments from Federal Reserve officials as well as indications key U.S. economic data may never be released due to the government shutdown.

CME Group's FedWatch Tool indicates the chances of another quarter point rate cut at the next Fed meeting have slumped to 53.2 percent from 66.9 percent a week ago.

After moving sharply lower early in the session, stocks saw even further downside over the course of the trading day on Thursday. The major averages all showed significant moves to the downside after closing mixed for two consecutive sessions.

The major averages ended the just off their lows of the session. The Nasdaq plummeted 536.10 points or 2.3 percent to 22,870.36, the S&P 500 plunged 113.43 points or 1.7 percent to 6,737.49 and the Dow tumbled 797.60 points or 1.7 percent to 47,457.22.

The Dow pulled back well off the record closing high set on Wednesday amid a steep drop by shares of Disney (DIS), with the entertainment giant diving by 7.8 percent.

Disney came under pressure after the company reported fiscal fourth quarter earnings that exceeded analyst estimates but weaker than expected revenues.

Valuation concerns also continued to weigh on tech stocks, with AI darling and market leader Nvidia moving sharply lower along with tech heavyweights like Broadcom (AVGO) and Alphabet (GOOGL).

The weakness on Wall Street may also have reflected uncertainty whether key U.S. economic will be released following the end of the longest government shutdown in U.S. history.

While President Donald Trump has signed a short-term funding bill, White House press secretary Karoline Leavitt told reporters on Wednesday that the October jobs and consumer price inflation reports are "likely never being released" as a result of the shutdown.

As a result, traders and the Federal Reserve may continue to be left "flying blind" with regard to the strength of the U.S. economy.

Computer hardware stocks turned in some of the market's worst performances on the day, with the NYSE Arca Computer Hardware Index plummeting by 7.0 percent.

Semiconductor, networking and software stocks also saw substantial weakness, contributing to the steep drop by the tech-heavy Nasdaq.

Outside of the tech sector, gold, financial and airline stocks showed significant moves to the downside amid broad-based weakness on Wall Street.

Commodity, Currency Markets

Crude oil futures are jumping $0.81 to $59.50 a barrel after rising $0.20 to $58.69 a barrel on Thursday. Meanwhile, after sliding $19.10 to $4,194.50 ounce in the previous session, gold futures are plummeting $134 to $4,060.50 an ounce.

On the currency front, the U.S. dollar is trading at 153.74 yen versus the 154.55 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1644 compared to yesterday's $1.1631.

Asia

Asian stocks followed Wall Street lower on Friday as investors fretted about lofty tech valuations and the U.S. economic outlook.

A mixed set of economic indicators from China and cautious comments from Federal Reserve officials on the interest rate trajectory also dented sentiment.

The dollar held losses, while gold edged up toward $4,200 an ounce ahead of speeches from several Federal Reserve officials later in the day.

Oil prices rose over 1 percent after a Ukrainian drone attack early on Friday damaged a docked ship, apartment buildings and an oil depot in the Russian Black Sea port of Novorossiysk.

In addition, Russia launched large-scale air strikes on the Ukrainian capital, damaging residential buildings across the city, further escalating the war in Ukraine.

China's Shanghai Composite Index slumped 1.0 percent to 3,990.49 and Hong Kong's Hang Seng Index tumbled 1.9 percent to 26,572.46 as a slew of Chinese data signaled a further loss of momentum in October.

Data showed industrial production rose 4.9 percent year-on-year in the month, falling shy of expectations for an increase of 5.5 percent and down from 6.5 percent in September.

Retail sales were up 2.9 percent - exceeding expectations for 2.7 percent after rising 3.0 percent in the previous month. Fixed asset investment fell 1.7 percent from last year, missing forecasts for a decline of 0.9 percent following the 0.5 percent drop a month earlier.

The jobless rate came in at 5.1 percent versus expectations for 5.2 percent. House prices fell 2.2 percent year-on-year, matching September's decline.

Japanese markets fell sharply as tech stocks succumbed to profit taking due to concerns over sky-high valuations. The Nikkei 225 Index dove 1.8 percent to 50,376.53, while the broader Topix Index settled 0.7 percent lower at 3,359.81.

Advantest, Tokyo Electron and SoftBank Group lost 6-7 percent. Among the top gainers, TOPPAN Holdings soared 14 percent and Tokyo Tatemono surged 10.4 percent.

Seoul stocks lost ground due to selling by foreign investors on dwindling rate cut hopes. The Kospi plummeted 3.8 percent to 4,011.57 despite the U.S. agreeing to lower tariffs on Korean cars and auto parts and setting semiconductor tariff rates "no less favorable" than those applied to Korea's competitors, such as Taiwan.

Australian markets hit a new four-month low on Fed rate uncertainty and concerns about a slowing Chinese economy. The benchmark S&P/ASX 200 Index slumped 1.4 percent to 8,634.50, dragged down by bank, technology and material stocks. The broader All Ordinaries Index tumbled 1.4 percent to 8,907.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index closed down 1.0 percent at 13,464.46, extending losses from the previous session and hitting a two-week low.

Europe

European stocks have moved sharply lower on Friday, extending losses from the previous session as investors fret about an artificial intelligence bubble and the outlook for U.S. interest rates.

The longest government shutdown in United States history has ended but the final agreement left major policy questions unresolved.

The White House has said last month's jobs report and inflation data would "likely never" be released.

Investors were also reacting to data that showed China's slowdown worsened in October, dragged by soft consumer demand and a deepening property downturn.

The U.K.'s FTSE 100 Index is down by 1.9 percent, the German DAX Index is down by 1.8 percent and the French CAC 40 Index is down by 1.7 percent.

British commercial landlord Land Securities has tumbled despite reporting strong income growth for the half year ended September 30, 2025.

Likewise, Swiss Re has also slumped despite reporting a net income of $4 billion for the first nine months of 2025, an 85 percent increase from the same period last year.

Meanwhile, Siemens Energy has soared. The German group substantially raised its mid-term financial targets following strong demand for gas turbines, services and power transmission technology.

Luxury giant Richemont has also surged after its first-half financial results showed strong resilient growth.

Financial services major Allianz has also moved to the upside after posting a better-than-expected 15 percent increase in third-quarter net profit.

U.S. Economic News

Kansas City Federal Reserve President Jeffrey Schmid is due to speak on monetary policy and the economic outlook before the "Energy and the Economy: The Geography of Energy Flows" conference at 10:05 am ET.

At 2:30 pm ET, Dallas Federal Reserve President Lorie Logan is scheduled to participate in a fireside chat before the "Energy and the Economy: The Geography of Energy Flows" conference.

Atlanta Federal Reserve President Raphael Bostic is due to participate in a moderated conversation before the Association for Public Policy Analysis and Management annual conference at 3:20 pm ET.