Notably, Super Micro Computer (SMCI) fell 32.68%, the worst performer on the Nasdaq.
US economic indicators temper expectations for a Fed rate cut in December
On Wednesday, the ADP reported an increase of 233,000 private sector jobs in October, up from 159,000 in September. The October report signaled a resilient U.S. labor market. A tighter labor market can boost wages, boosting consumer spending and demand-driven inflation. Expectations of higher inflation dampened investor expectations of a Fed rate cut in December.
According to the CME FedWatch Tool, the probability of a Fed rate cut in December fell 25 basis points from 74.1% on October 30 to 69.7% on October 31.
China’s manufacturing sector is returning to expansion
The Chinese economy took center stage on Thursday, with NBS private sector PMIs influencing market risk sentiment. The NBS manufacturing PMI rose to 50.1 in October from 49.8 in September, returning to expansion. However, activity in the services sector remained subdued, with the NBS Non-Manufacturing PMI rising from 50.0 to 50.2 in October.
The tepid data could fuel speculation about more policy stimulus to strengthen the economy.
Bank of Japan maintains interest rate at 0.25%
The Bank of Japan was also in the spotlight on Thursday. In line with expectations, the BoJ kept interest rates at 0.25%.