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After Tech Sell-Off, Investors Brace for More Market Volatility
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In Short: Investors brace for more market volatility as tech stocks decline and the Federal Reserve prepares to announce interest rate decisions.
Money markets are pricing in an 80% chance of a 25-basis-point increase from the Federal Reserve, according to International Business Times Australia. The S&P/ASX 200 index was down 0.2% at 8,892 points late Monday morning, with technology and mining stocks leading declines, while banks rose after strong results from Westpac.
Markets are getting a boost from news that the U.S. Government is seeking a diplomatic resolution to the conflict in the Middle East, as reported by Investopedia. The Dow Jones Industrial Average was up 1.1%, or more than 500 points, in recent trading, while the tech-heavy Nasdaq Composite and benchmark S&P 500 added 0.6% and 0.8%, respectively.
The tech sector rout sent major indexes reeling on Friday, pushing the Nasdaq Composite to its biggest monthly decline since March 2025, when volatility gripped financial markets due to concerns about the Trump administration’s tariff decisions. Quarterly results from Google parent Alphabet, chipmaker Intel, and Amazon weighed on the tech sector last week.
Shares of Marvell Technology dropped 5% following news that the designer was purchasing Lumentum in a deal that values the optical components maker at $115 billion, according to Investopedia. The elevated skew reading at 149.22 indicates potential market jitters as the Fed’s choice on interest rates looms large on traders’ minds.
The VIX stands at 17.52, with market conditions characterized as transitioning and the term structure in contango. Treasury yields rose on Tuesday, with the benchmark 10-year Treasury note yield hitting its highest level since July 2007 as investors brace for what may be the first in a series of rate hikes from the Federal Reserve.
Investors are weighing persistent inflation, employment conditions, and the Fed's policy outlook. The one-day volatility gauge soared by 19% yesterday, the only measure to gain among various volatility metrics.
AI developer Anthropic has announced plans to sell up to 552.9 billion yen (approx. $3.5 billion) worth of shares directly to Japanese investors as part of its upcoming U.S. Public listing, according to Thenews. Some investors have discussed a valuation of about $1.5 trillion for the company, Reuters has reported.
Investors will assess two major market forces today: the Fed decision and another round of tech earnings. It looks set to be a cautious open to trading as investors stay on the sidelines ahead of a series of big market moments this afternoon.
What this adds
The elevated skew reading at 149.22 indicates potential market jitters as the Fed’s choice on interest rates looms large on traders’ minds.
The VIX stands at 17.52, with market conditions characterized as transitioning and the term structure in contango.
AI developer Anthropic has announced plans to sell up to 552.9 billion yen (approx. $3.5 billion) worth of shares directly to Japanese investors as part of its upcoming U.S. public listing.
What's confirmed
- Money markets are pricing in an 80% chance of a 25-basis-point increase from the Federal Reserve, according to International Business Times Australia. The S&P/ASX 200 index was down 0.2% at 8,892 points late Monday morning, with technology and mining stocks leading declines, while banks rose after strong results from Westpac.
- Markets are getting a boost from news that the U.S. Government is seeking a diplomatic resolution to the conflict in the Middle East, as reported by Investopedia. The Dow Jones Industrial Average was up 1.1%, or more than 500 points, in recent trading, while the tech-heavy Nasdaq Composite and benchmark S&P 500 added 0.6% and 0.8%, respectively.
- The tech sector rout sent major indexes reeling on Friday, pushing the Nasdaq Composite to its biggest monthly decline since March 2025, when volatility gripped financial markets due to concerns about the Trump administration’s tariff decisions. Quarterly results from Google parent Alphabet, chipmaker Intel, and Amazon weighed on the tech sector last week.
- Shares of Marvell Technology dropped 5% following news that the designer was purchasing Lumentum in a deal that values the optical components maker at $115 billion, according to Investopedia. The elevated skew reading at 149.22 indicates potential market jitters as the Fed’s choice on interest rates looms large on traders’ minds.
- The VIX stands at 17.52, with market conditions characterized as transitioning and the term structure in contango. Treasury yields rose on Tuesday, with the benchmark 10-year Treasury note yield hitting its highest level since July 2007 as investors brace for what may be the first in a series of rate hikes from the Federal Reserve.
- Investors are weighing persistent inflation, employment conditions, and the Fed's policy outlook. The one-day volatility gauge soared by 19% yesterday, the only measure to gain among various volatility metrics.
- AI developer Anthropic has announced plans to sell up to 552.9 billion yen (approx. $3.5 billion) worth of shares directly to Japanese investors as part of its upcoming U.S. Public listing, according to Thenews. Some investors have discussed a valuation of about $1.5 trillion for the company, Reuters has reported.
- Investors will assess two major market forces today: the Fed decision and another round of tech earnings. It looks set to be a cautious open to trading as investors stay on the sidelines ahead of a series of big market moments this afternoon.
What's still developing
- Consequently, given this backdrop, today emerges as the least expensive day in terms of implied volatility.
- IPO have not yet been finalized in the filings, secondary market discussions and reports have floated potential valuations reaching up to $1.5 trillion.
- This localized cross-border allocation follows a similar playbook seen during SpaceX’s massive IPO, where Japanese investors secured roughly $2.2 billion of the total shares.
- Bond markets around the globe saw yields rise, in part due to continued pressure from rising oil prices, which have boosted expectations for central banks around the globe to raise interest rates.
- Still, a surprise passage has not been priced in, which could boost the crypto market’s outlook with Bitcoin likely to gather the momentum for a sustained breakout above $80,000.
- It's a positive handover from Asia, with the South Korean index spiking overnight following a solid set of numbers from market heavyweight SK Hynix.
- The general consensus is that the Fed will decide to keep rates unchanged, an outcome some market participants view as largely anticipated.