How the Market Is Doing Today
Markets opened the new month on uncertain footing as risk‑off sentiment spread across asset classes. A sharp crypto selloff, rising global bond yields, and renewed concerns over a potential Bank of Japan rate hike pressured equities in early trading. Major indices spent the session in the red as traders reassessed liquidity conditions and the broader macro backdrop.
Crypto Rout Sets the Tone
Bitcoin’s latest drop was one of the dominant drivers of sentiment. After sliding below $85,000, the cryptocurrency extended a weekslong drawdown that has erased more than a trillion dollars from the digital asset market. According to Reuters, bitcoin fell roughly 6.5% intraday, dragging related equities sharply lower. Coinbase, Bitfarms, and other crypto‑linked names dropped between 5% and 7%.
Bloomberg reported that nearly $1 billion in leveraged crypto positions were liquidated as the sudden slump hit high‑beta pockets of the market. Meanwhile, CNN highlighted the growing risk of a broader unwinding of the yen carry trade, which has historically funneled liquidity into both crypto and stocks. With traders forced to reduce leverage, the latest downturn is fueling concerns of additional spillover risk.
BOJ Rate Hike Fears Spill into Global Markets
One of the key catalysts behind the risk‑off tone was signaling from the Bank of Japan. Japanese government bond yields hit their highest levels since 2008 after BOJ Governor Kazuo Ueda hinted at the possibility of a December rate hike—a major shift after years of near‑zero borrowing costs.
Both Reuters and CNN noted that this shift threatens the profitability of the yen carry trade, in which global investors borrow cheap yen to buy higher‑yielding assets. As expectations for a rate hike rise, the yen strengthens and the economics of carry trades deteriorate, prompting forced selling across risky assets—including U.S. equities and cryptocurrencies.
Rising Yields Pressure Equities
The selloff in Japan helped push U.S. Treasury yields higher, adding another headwind for stocks. Reuters reported that real estate and utilities—two sectors sensitive to interest rate moves—fell more than 1% as yields climbed. Higher borrowing costs also weighed on growth stocks, which had been leading markets through much of the year.
According to Yahoo Finance, the major U.S. indices traded lower: