On Friday evening, the Nasdaq 100 closed October with a 3.46% plunge in a single session. Two days earlier, two Fed voters were calling for a rate hike, while the ECB learned that it would have a new president in February. Central bankers talked tightening all week. The bond market, meanwhile, was betting on a slowdown.
In brief
- Fed: rates unchanged on October 28, with the upper bound at 4.00%, but two voters already wanted a quarter-point hike.
- Nasdaq: the Nasdaq 100 lost 3.46% on Friday, closing at 28,384.85 points, and the Nasdaq posted its worst month since March 2025.
- ECB: deposit rate held at 2.5% on October 29, Christine Lagarde to leave early in February, eurozone inflation due on November 4.
The Fed pauses, but its hawks do not
On Wednesday, the Federal Reserve stood pat. No surprise: according to CNBC, markets assigned less than a 10% chance to a hike. The vote, however, was revealing. Two of the twelve voters dissented, and both wanted to raise rates by a quarter point. The statement said inflation remained elevated and that more information was needed before taking action.
Thursday’s figures did little to help the doves. US third-quarter GDP grew at an annualized rate of 3.4%, versus 3.2% expected. The core PCE price index rose 0.3% month on month, as expected (the market reaction, release by release). Weekly jobless claims remained at 194,000, below the 198,000 forecast. By the end of the week, Lorie Logan, president of the Dallas Fed, said at least two more quarter-point hikes would still be needed, investingLive reported.
And yet, the US 10-year yield fell. On Friday morning, it was down 8 basis points at 4.908%, according to investingLive’s European session wrap. When tech stocks fall, bonds become a refuge again, whatever the hawks may say.
Central bankers talk about inflation. Investors, meanwhile, buy bonds as soon as growth starts to falter.
The Fed will meet again on December 8 and 9. Minutes from the October meeting will be released on November 18, according to the Fed’s calendar.
The ECB loses its president, but not its dilemma
On Thursday, the ECB kept its refinancing rate at 2.65% and its deposit rate at 2.5%. Christine Lagarde acknowledged that a hike had been discussed. But the day’s real news was elsewhere: she will leave in February, nine months before the end of her term, The Irish Times reported. Isabel Schnabel will join the IMF in January, while chief economist Philip Lane’s term expires in May. Three key seats to fill within a few months.
The dilemma remains unresolved. On one side, inflation is picking up again. In France, it reached 3.4% year on year in October, up from 3.1% in September, according to Journal du Net, which also reported that consumer confidence had fallen to its lowest level since June 2013. Italy posted 5.4% year on year, versus 4.6% expected. On the other, growth is stalling. French GDP contracted in the third quarter, according to franceinfo. Germany avoided the worst with growth of 0.2%, against expectations, while its prices fell 0.2% month on month.
For EUR/USD traders, the December equation is straightforward: one final hike to contain prices, or a pause to spare an economy that has ground to a halt? The next clue will be October’s flash estimate, published by Eurostat on November 4. In September, it stood at 3.8%.
Nasdaq: the AI bill comes due
It all started with Amazon. Its results reignited fears of endless spending on artificial intelligence, and tech stocks plunged. On Friday, the Nasdaq Composite shed 2.86% to 25,437 points. The Nasdaq 100 fell 3.46%, closing October with its worst month since March 2025.
No one doubts that AI works anymore. Investors want to know who is paying for it, and when it will generate returns. Even financing for upcoming IPOs is becoming a concern: investingLive relayed a Financial Times report saying that Blackstone had warned Anthropic that it might not receive an investment-grade credit rating after its IPO.
Apple, Palantir and AMD report next week. Three tests to determine whether this bout of weakness is merely a correction.
Oil holds firm, while gold and bitcoin struggle
Not every safe haven played its part. On Friday morning, WTI was up 2.2% at $104.25, according to investingLive, despite hopes of peace talks. The geopolitical risk premium remains. Gold, meanwhile, was down 1.2% at $3,971, while bitcoin fell 1.8% to $77,448, still weighed down by concerns over Binance’s security.
In FX markets, the Swiss franc and yen led the way, while the dollar declined alongside US yields. When fear comes from the tech sector, money flows into safe-haven currencies and bonds, not into the yellow metal.
Loonie, kiwi, aussie: each marches to its own beat
Commodity-linked currencies had a week of their own. The Bank of Canada raised its rate from 2.25% to 2.50%. Two days later, Canadian August GDP came in flat at 0.0%, versus 0.2% expected. A rate hike followed by zero growth: the loonie no longer knows which way to turn.
In Wellington, the RBNZ left its rate at 2.75%, while the consensus expected 3.00%. In Australia, inflation rose to 4.3% year on year, versus 4.2% expected, and the monthly index jumped 0.8%.
| Central bank | Date | Decision | Forecast | Previous |
|---|---|---|---|---|
| RBNZ | Oct. 28 | 2.75% | 3.00% | 2.75% |
| Bank of Canada | Oct. 28 | 2.50% | 2.50% | 2.25% |
| Fed (upper bound) | Oct. 28 | 4.00% | 4.00% | 4.00% |
| ECB (refinancing) | Oct. 29 | 2.65% | 2.65% | 2.65% |
| Bank of Japan | Oct. 30 | unchanged | unchanged | — |
The RBNZ’s lesson: when a central bank disappoints the hawks, the gap between the forecast and the actual figure matters more than the decision itself.
Week ahead: elections, inflation and jobs
Three high-risk events are lined up. On Tuesday, November 3, Americans will vote in the midterm elections. On Wednesday, November 4, Eurostat will publish eurozone inflation. Then the monthly US jobs report will indicate whether the Fed is right to keep a hike on the table. In the meantime, Apple, Palantir and AMD will test tech buyers’ patience.
A week like this widens price gaps and wicks. Before opening a position, check the release times in the Edgyx economic calendar, which measures the market’s reaction to each one. Then adjust your position size to your stop, not the other way around.
The stop gets wider, the position size gets smaller, and euro-denominated risk remains under control. Record in your journal what you do on release days: you will quickly find out whether these sessions make or cost you money.
Key takeaways
- The Fed paused, but two voters already wanted to raise rates. Next meeting: December 8 and 9.
- The ECB is keeping its deposit rate at 2.5% and will soon have a new leadership team. October inflation, published on November 4, will influence the December decision.
- The Nasdaq posted its worst month since March 2025. Results from Apple, Palantir and AMD will show whether the correction spreads.
- Oil remains elevated, while gold and bitcoin are falling: safe havens no longer move as one.
- Elections, European inflation and US jobs: reduce position size rather than betting on the outcome.
