Asian stocks fall as US Fed rate cut doubts emerge

Asian stocks fell in tandem with Wall Street as uncertainty over Federal Reserve interest-rate cuts and stretched technology valuations weighed on equities.

The MSCI Asia Pacific Index fell 1%, with almost three stocks declining for every one that gained. Still, the gauge was poised for its third advance in four weeks. The S&P 500 closed 1.7% lower, while the Nasdaq 100 declined 2.1% Thursday. Attention was also on the pound on Friday, which fell after the Financial Times said UK Chancellor Rachel Reeves was ditching a planned income tax rise.

Treasuries and a gauge of the dollar steadied as investors parsed commentary from Fed officials that cast doubt over a December rate cut. Also, the October jobs report will be released without a reading of the unemployment rate.

The moves dealt a fresh blow to risk sentiment, highlighted by heavy selling in high-flying tech giants amid mounting valuation concerns. Beneath the surface, some investors pointed to a rotation into more defensive sectors.

With optimism over the US government’s reopening largely priced in, traders are now focusing on the upcoming wave of economic data, as the chances of a December Fed rate cut slip below 50%.

While President Donald Trump signed legislation to end the longest shutdown in US history, it may still take a while for the federal bureaucracy to restart fully. Even so, the October jobs report will skip the unemployment rate as the household survey wasn’t conducted, US top economic adviser Kevin Hassett told Fox News.