U.S. Stocks and Crypto Slide as Treasury Yields Post Biggest Drop in Two Months

Market Overview

U.S. equities and cryptocurrencies fell sharply on Thursday after Challengers October job-cut report showed corporate layoffs hitting their highest level for the month in over two decades. Mounting doubts over the return on AI investments and hawkish remarks from Federal Reserve officials further fueled a broad-based sell-off.

Risk aversion spiked, with the CBOE Volatility Index (VIX) briefly surging above 20. The “Magnificent Seven” tech giants led the decline—NVIDIA logged its third consecutive drop, Microsoft extended losses for a seventh straight session, and AMD plunged over 7%. Tesla slipped 3.5%, retreating from post-meeting gains even after shareholders approved Elon Musks trillion-dollar compensation package.

Chinese ADRs outperformed broader markets, with XPeng jumping nearly 10% against the tide. Flight-to-safety demand sent 10-year Treasury yields tumbling 7.6 basis points, the biggest single-day decline in two months. The U.S. dollar index fell for a second day, while gold initially climbed on dollar weakness but reversed sharply, failing to hold the $4,000/oz level. Crude oil also gave up earlier gains.

Hot Topics Ahead

● AI Revolution Triggers Massive Layoffs

According to the Challenger, Gray & Christmas report, U.S. companies announced 153,074 job cuts in October, up 175.3% year-over-year—the highest October figure in 20 years. Year-to-date layoffs have exceeded one million, marking the largest total since the pandemic. Meanwhile, corporate hiring plans hit their lowest level since 2011, signaling a significant cooling in labor demand.

● “The Great Debt Cycle” Enters Its Most Dangerous Phase

Fed Chair Jerome Powell noted the need to “increase reserves at an appropriate time,” which Ray Dalio interprets as a return to quantitative easing (QE). However, unlike past recessions, todays environment is defined by massive fiscal stimulus—ballooning debt levels and deficits funded through large-scale Treasury issuance. Dalio warns that this effectively monetizes government debt rather than merely supplying liquidity to the private sector, potentially recreating the liquidity frenzy seen before the 1999 bubble burst.

Key Data to Watch

23:00 GMT+8 – U.S. November 1-Year Inflation Expectations (Preliminary)

23:00 GMT+8 – U.S. University of Michigan Consumer Sentiment Index (Preliminary)