London, Nov 14, 2025 – World stock markets tumbled on Friday after Federal Reserve officials signaled a more hawkish stance, dampening expectations of a December interest rate cut. The sell-off was compounded by weak economic data, concerns over an AI-driven tech bubble, and UK budget uncertainty.

Wall Street Futures Point to Lower Open

U.S. stock futures indicated a bleak start for Wall Street following sharp losses on Thursday. The Dow Jones, S&P 500, and Nasdaq all dropped significantly, with high-beta tech names like Palantir, Oracle, and Nvidia among the hardest hit.

Fed Officials Signal Caution

Investors had hoped for a rate reduction in December. However, growing signs of inflation persistence and relative labor market stability have led Fed policymakers to adopt a more cautious outlook. Markets now price in a 49% chance of a 0.25% Fed rate cut, down from 60% earlier this week.

U.S. data disruptions due to a government shutdown further fueled uncertainty. White House officials indicated that October unemployment data may never be released, leaving the Fed with limited economic clarity.

Asian and European Markets Decline

Asian equities outside Japan fell nearly 2%, while Japan’s Nikkei lost 1.8% and South Korea dropped 3.8%. China’s CSI 300 eased 0.9% after October industrial output and retail sales missed expectations.

European markets also suffered, with UK stocks rattled by budget speculation. Sterling initially fell sharply after reports that Prime Minister Keir Starmer and Finance Minister Rachel Reeves abandoned plans to increase income taxes but later recovered some ground. Ten-year UK gilt yields rose around 6 basis points to 4.50%.

Safe-Haven Assets and Commodities

Investors sought safety in U.S. Treasury bonds, with the two-year yield dipping slightly to 3.58% and the 10-year yield rising marginally to 4.12%. The dollar index edged lower to 99.19, while the yen recovered to 154.48 per dollar after recent weakness.

Oil prices rose about 1% following a Ukrainian drone attack that damaged a Russian oil depot, lifting Brent crude to $63.65 a barrel. Spot gold remained largely unchanged at $4,173 per ounce after snapping a four-day winning streak.

Market Outlook

Jeremy Stretch, head of G10 FX Strategy at CIBC Markets, noted:

“Until we get the delayed data, we are in a holding pattern. The 50-50 odds of a December rate cut, alongside concerns about an AI bubble, have destabilized sentiment.”

Analysts caution that volatility may persist in tech stocks and currency markets until clearer signals emerge regarding Fed policy and global economic conditions.