Equities Lift After Fed’s Williams Reinforces Expectations for Rate Cuts

US stock futures and Treasuries pushed higher in a turbulent trading session after dovish remarks from Federal Reserve official John Williams revived expectations for an interest-rate cut in December. Meanwhile, Bitcoin slipped back under $84,000 as risk appetite wavered across digital assets.

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S&P 500 futures climbed about 0.4%, reversing several earlier swings as sentiment gradually improved. The shift came after the New York Fed President suggested that the central bank still has room to ease monetary policy in the near term, pointing to a cooling labor market as one reason officials could consider a cut sooner rather than later.

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Treasury markets rallied on the comments, sending the benchmark 10-year yield toward its lowest point of the month as traders boosted the probability of a December rate cut to more than 60%. Nvidia Corp., which had been down over 2% in premarket trading, erased those declines as futures rebounded. The dollar, however, held relatively steady, reflecting the mixed tone across global markets.

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Friday’s volatile action follows a staggering $5 trillion selloff in global equities that has left investors questioning whether the recent downturn still has further to run. The S&P 500’s sharp intraday reversal on Thursday the steepest since April’s tariff-driven market turmoil rekindled long-standing worries about stretched valuations in the tech sector and unclear direction from the Federal Reserve.

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“All asset classes have been fragile for a while,” said Neil Birrell, chief investment officer at Premier Miton Investors. “In equities, we’ve seen a consistent buy-the-dip mindset, but when valuations are rich and the system carries significant leverage, momentum traders and retail investors eventually step back.”

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Technical indicators reinforced that caution. Thursday’s losses completely wiped out the previous session’s rally, forming what chart analysts call a “bearish engulfing pattern.” The swift and unusually large reversal echoed a similar setup in early March that kicked off a roughly 5% slide in the benchmark index.

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This time, the warning signs appear even more forceful. The S&P 500 broke below its 50-day and 100-day moving averages levels many traders consider key support markers. Momentum indicators have weakened noticeably, and market breadth has continued to narrow. For many technical analysts, these are signs that bearish forces are gaining traction in the near term.

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“This is a logical correction after the massive run-up in tech stocks this year,” said Rory McPherson, chief investment officer at Magnus Financial Discretionary Management. “There’s a chance the pullback deepens because markets aren’t oversold yet. What the Fed signals at the next meeting will be absolutely crucial.”

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Even so, some market history offers a counterpoint. Goldman Sachs partner John Flood noted that since 1957, there have been only eight instances including Thursday’s when the S&P 500 opened more than 1% higher and still ended the day in negative territory.

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In those cases, the index typically rebounded, delivering gains of at least 2.3% over the next day and week, and an average increase of 4.7% over the subsequent month. While past performance isn’t a guarantee, the pattern suggests that extreme reversals sometimes set the stage for a short-term bounce.

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Elsewhere in global markets, developments in Asia captured attention. Japan’s Prime Minister Sanae Takaichi’s cabinet approved its largest supplementary spending package since the pandemic began, totaling ¥17.7 trillion ($112 billion) in general account expenditures. The move underscores the government’s efforts to support growth amid currency volatility and slowing momentum in the world’s third-largest economy.

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The spending announcement came on the heels of Japan issuing its strongest warning yet about the yen’s recent slide. The finance minister explicitly mentioned currency intervention as an option a rare and forceful signal though the comments had only limited impact. Even so, the yen posted its biggest one-day gain in a week as traders digested the government’s stance.

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Commodity markets were also active. Oil pared earlier losses after several of Ukraine’s key European allies publicly rejected central elements of a US-Russian proposal to end the war. Prices had initially slipped despite the expiration of the US wind-down period for sanctions on Russia’s two largest oil producers a shift that could tighten supply further. The geopolitical pushback from European leaders added fresh uncertainty, helping crude stabilize.

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As the week draws to a close, investors remain caught between competing narratives: dovish signals from the Fed that could bolster risk assets, and technical and macro forces that suggest the market may not be out of the woods yet. For now, traders are navigating one of the most delicate stretches of the year, balancing hopes for a policy pivot against persistent concerns about valuations, volatility, and global instability.

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