Global markets faced turbulence by midday Wednesday as an unwinding of yen-dollar carry trades drove sharp losses in U.S. equities, with the tech-heavy Nasdaq 100 falling 1.2% in intraday trading.

Rising expectations that the Bank of Japan may raise interest rates in December pushed the dollar-yen pair down by 1.5%, marking its steepest drop since late September. This triggered a wave of “risk-off” sentiment, pressuring major indices.

The S&P 500 dipped 0.5% by midday, on track to snap a seven-day winning streak, while small caps in the Russell 2000 remained relatively steady. Treasury yields fell significantly as fresh economic data failed to stoke concerns about an imminent change in the Federal Reserve's interest rate path.

The U.S. economy expanded at an annualized 2.8% in the third quarter, according to a second estimate that matched earlier print. October's Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, also came in line with forecasts, showing a modest uptick.

Traders continue to bet on easier monetary policy, with Fed funds futures pricing in a 70% probability of a 25-basis-point rate cut at the Dec. 18 meeting.

In commodities market, gold inched up by 0.2%, while oil prices fell by 1% to $68 a barrel, heading for a three-day decline. Natural gas plummeted 7%, amid less cold weather forecasts reducing the outlook for heating demand.

Meanwhile, cryptocurrencies reversed their recent losing streak. Bitcoin BTC/USD rallied nearly 5% to above $96,000, while Ethereum ETH/USD surged more than 7%, hitting price levels last seen in late June 2024.

Wednesday’s Performance In Major U.S. Indices, ETFs

Major Indices	Price	Chg %
Russell 2000	2,424.01	0.0%
Dow Jones	44,747.65	-0.3%
S&P 500	5,994.06	-0.5%
Nasdaq 100	20,682.38	-1.2%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY edged 0.4% lower to $598.35.
• The SPDR Dow Jones Industrial Average DIA eased 0.2% to $448.13.
• The tech-heavy Invesco QQQ Trust Series QQQ fell 1.1% to $503.71.
• The iShares Russell 2000 ETF IWM inched 0.1% up to $241.01.
• The Real Estate Select Sector SPDR Fund XLRE outperformed, rising 1%. The Technology Select Sector SPDR Fund XLK lagged, down 1.9%.

Wednesday’s Stock Movers

• Semiconductor stocks, as tracked by the iShares Semiconductor ETF SOXX, witnessed broad-based declines amid rising trade tensions between U.S. and China following Donald Trump’s pledge to raise tariffs. Micron Technologies Inc. MU, Marvell Technology Inc. MRVL and Arm Holdings plc ARM were among the weakest performers, with drops of about 4.4%.
• Crypto-linked stocks rebounded after sharp drops witnessed a day earlier. Shares of Bit Digital Inc. BTBT were up 16%, while Riot Platforms Inc. RIOT and MARA Holdings Inc. MARA were up by 9% and 6%, respectively.
• Dell Technologies Inc. DELL tumbled by over 11% in reaction to earnings.
• Other stocks reacting to quarterly results were Crowdstrike Holdings Inc. CRWD, down 5.1%; Workday Inc. WDAY, down 5.2%; Autodesk Inc. ADSK, down 8%; HP Inc. HPQ, down 12% and Nutanix Inc. NTNX, down over 6%.

Read Now:

• US–Mexico Trade Tensions Escalate As Mexican Peso Hits August 2022 Lows: Why Is Auto Industry Most At Risk?

Photo: Shutterstock