Overnight US stocks | Nasdaq and S&P 500 indexes experienced their biggest single-day drop since early April, with Bitcoin dropping more than 13% at one point.

On Friday, the three major indices plummeted, and Bitcoin and Ethereum took a dive. The U.S. President made tough remarks on social media on Friday, threatening to impose "massive increases in tariffs" on Chinese goods. After the news came out, Wall Street traders quickly hit the sell button, and concerns about an escalation in the trade war instantly overwhelmed the market's previous optimism. [US Stocks] At the close, the Dow Jones Industrial Average fell 878.82 points, or 1.90%, to 45,479.60; the Nasdaq fell 820.20 points, or 3.56%, to 22,204.43; and the S&P 500 Index fell 182.59 points, or 2.71%, to 6,552.52. The Nasdaq and S&P 500 posted their largest single-day declines since April 10th. Large-cap tech stocks fell across the board, with Amazon.com, Inc. (AMZN.US), Tesla, Inc. (TSLA.US), NVIDIA Corporation (NVDA.US) down around 5%, and Apple Inc. (AAPL.US) down 3.45%. The Nasdaq Golden Dragon China Index fell over 6%, with Alibaba Group Holding Limited Sponsored ADR (BABA.US) and Baidu Inc Sponsored ADR Class A (BIDU.US) both down over 8%, and Bilibili, Inc. Sponsored ADR Class Z (BILI.US) down 9%. [European Stocks] The DAX30 index in Germany fell 427.04 points, or 1.73%, to 24,225.10; the FTSE 100 index in the UK fell 82.55 points, or 0.87%, to 9,426.85; the CAC40 index in France fell 123.36 points, or 1.53%, to 7,918.00; the Euro Stoxx 50 index fell 99.31 points, or 1.77%, to 5,526.25; the IBEX35 index in Spain fell 128.79 points, or 0.83%, to 15,474.21; and the FTSE MIB index in Italy fell 781.60 points, or 1.83%, to 42,010.00. [Crude Oil] The price of light crude oil futures for November delivery on the New York Mercantile Exchange fell $2.61 to close at $58.90 per barrel, down 4.24%; Brent crude oil futures for December delivery fell $2.49 to close at $62.73 per barrel, down 3.82%. [Cryptocurrency] After the U.S. market closed, cryptocurrencies took a dive, with Bitcoin falling 13.5% intraday, breaching the $110,000 mark to a low of $105,930, and Ethereum dropping over 17% to touch $3,344. According to Coinglass data, over $7.4 billion in cryptocurrency assets were wiped out in the past 24 hours, with long positions accounting for about $6.7 billion and short positions about $695 million. Liquidation was mainly concentrated in about four hours on Friday afternoon in the U.S., with around $6.6 billion in positions being closed. [US Dollar Index] The U.S. dollar index against six major currencies fell 0.56% on the day, closing at 98.977 in the forex market. At the close of the New York forex market, 1 euro exchanged for 1.1609 U.S. dollars, up from 1.1547 on the previous trading day; 1 pound exchanged for 1.3346 U.S. dollars, up from 1.3281 on the previous trading day. 1 U.S. dollar exchanged for 151.72 Japanese yen, down from 153.18 on the previous trading day; 1 U.S. dollar exchanged for 0.8013 Swiss francs, down from 0.8074 on the previous trading day; 1 U.S. dollar exchanged for 1.4000 Canadian dollars, down from 1.4031 on the previous trading day; 1 U.S. dollar exchanged for 9.5216 Swedish kronor, down from 9.5587 on the previous trading day. [Precious Metals] Spot gold regained the $4,000 mark, rising 0.91% intraday; spot silver rose 1.86% to $50.172. Randy Smallwood, Chief Executive Officer of Wheaton Precious Metals Corp, said, "I believe gold prices will surpass $5,000 next year... At this rate, gold prices could easily reach $10,000 per ounce by the end of 2030. This is no surprise to me. The silver market has long been in a state of undersupply." Silver inventories have been making up for this shortfall, but now these inventories are "almost depleted." Wheaton provides pre-paid financing to miners in exchange for a discount on future production. Driven by heightened political risks at GEO Group Inc and tight physical supply, investors are flocking to precious metals, driving gold prices up, and Wheaton is benefiting from it. [Metals] LME copper futures closed down $350 at $10,518 per tonne. LME aluminum futures closed down $50 at $2,748 per tonne. LME zinc futures closed down $9 at $3,002 per tonne. LME lead futures closed down $10 at $2,020 per tonne. LME nickel futures closed down $213 at $15,280 per tonne. LME tin futures closed down $887 at $36,173 per tonne. LME cobalt futures closed up $860 at $42,725 per tonne. Goldman Sachs Group, Inc. said in a report on Friday that it expects copper prices to remain in the range of $10,000 to $11,000 per tonne by 2026/2027. The bank added that the profit margins of nickel producers in Indonesia need to decline further to limit supply growth and reverse the continuing market surplus, forecasting that nickel prices will fall 6% to $14,500 per tonne by December 2026. Goldman Sachs Group, Inc. expects an oversupply in the aluminum market to emerge as Indonesian supply increases starting in mid-2026. Aluminum prices are expected to fall to $2,350 per tonne in the fourth quarter of 2026, and not return to current levels until 2030. [Macro News] Federal Reserve Governor Mussalem: Open to further rate cuts as additional insurance measures. Federal Reserve Governor Mussalem said in a speech: the Fed's goals are facing a tight situation; inflation is high, and the labor market is showing signs of potential weakness. Only when inflation expectations are securely anchored can a balanced monetary policy be effective. If inflation expectations get out of control, it will be even harder to handle short-term labor market fluctuations. Long-term inflation expectations are stable. Currently, inflation expectations for the next two years have risen slightly. Inflation is significantly above target. Of the inflation we see, only 10% is caused by tariffs. While the labor market appears to be close to full employment, it may be weakening. The impact of tariffs on inflation is expected to fade by the second half of 2026. It is expected that the labor market will slow moderately. Baseline expectations face substantial risks. Inflation could rise further. Support for a rate cut in September, open to further cuts as additional insurance measures, should be cautious; there is limited room for further easing before policy becomes too loose. The policy is between moderate tightening and neutrality. Monetary policy should continue to curb inflation. GDP is expected to show robust performance in the fourth quarter. GDP growth this year is expected to be close to its potential level. Trump administration officials confirm that massive federal government layoffs have begun. Office of Management and Budget Director Russell Vought announced on Friday that the Trump administration has begun laying off federal employees. Trump and Vought have repeatedly threatened to use the opportunity of a government shutdown to fire thousands of federal employees, whom Trump often refers to as members of the "deep state." Vought said when announcing the layoffs, "RIFs have begun." Reductions in force (RIFs) are the latest blow to federal employees, with 200,000 federal employees already reduced this year. According to AXIOS, a spokesman for the Office of Management and Budget confirmed that RIFs have started and are significant in scale. They did not specify which departments were affected. A government official recently stated that an additional 100,000 people are expected to leave by the end of this year. Federal Reserve Governor Waller: Hopes to continue rate cuts but should remain cautious. Federal Reserve Governor Waller said that employment growth in recent months may have turned negative, and the labor market is currently his biggest concern. Waller said, "Employment growth may have been negative in recent months. The labor market is weak, which is a critical point for policymakers and something we need to understand." The September nonfarm employment report, originally scheduled for release last week, was delayed due to the government shutdown. Waller, appointed by U.S. President Trump as a Federal Reserve Governor in 2020, is currently a top candidate to succeed Powell as Federal Reserve Chair, whose term expires in May next year. Waller stated that his interview process is progressing well and focused on serious economic issues, "with no political considerations." Waller also said he hopes to continue rate cuts but emphasized that policymakers should remain cautious. Insiders: The EU plans to reach a new trade agreement with the United States. According to insiders, the EU is planning to work with the United States on a new plan to implement the next phase of their trade agreement, with the goal of shelving Washington's proposals, which require the EU to rescind some regulatory measures long criticized by Trump. The current idea is to create a "checklist" to ensure the agreement stays on track and moves forward within the parameters set by both sides last summer. Earlier reports stated that earlier this month, Washington requested Brussels to amend several laws on technology, digital, and business environment, with EU officials considering these demands too stringent to serve as a basis for negotiations. The EU has stated its readiness to discuss these issues and address concerns, but will not relinquish its regulatory autonomy. Insiders say that following talks between EU Trade Commissioner Sevkovic and U.S. Trade Representative Grill last weekend, Brussels decided to shelve these demands and develop a new list. U.S. consumer confidence in October remains subdued, inflation expectations remain high. Joanne Hsu, Director of Consumer Surveys at the University of Michigan, stated that U.S. consumer confidence remained subdued in October. The Consumer Confidence Index registered 55 points, virtually unchanged from September. This month, consumers' views on their current personal financial situation and the business environment for the next year improved, but expectations for future personal finances and the assessment of current conditions for purchasing durable goods declined, offsetting each other. Overall, consumers believe that the economic outlook has not changed significantly compared to last month. "Pocketbook issues" such as high prices and weak job prospects continue to be consumers' top concerns. Currently, consumers do not expect these factors to improve significantly. Interviews also showed that there is little evidence so far that the continuing government shutdown has changed consumers' views on the economy. Meanwhile, expectations for inflation in the next year fell from 4.7% last month to 4.6% this month, but remain high. Long-term inflation expectations remain stable. [Individual Stock News] News: Morgan Stanley (MS.US) lifts restrictions on wealth clients holding cryptocurrency funds. Morgan Stanley reportedly informed its financial advisors on Friday that the company is expanding channels for crypto investments to all clients and allowing such investments in any type of account, including retirement accounts. Starting on October 15th, advisors will be able to promote cryptocurrency funds to any client. Previously, this option was only available to high-risk clients with at least $1.5 million in assets who wanted to hold crypto assets in taxable brokerage accounts. This move marks the latest move by the world's largest wealth management firm to further expand client access in the cryptocurrency asset space, as the U.S. government's attitude towards this emerging asset class has shifted with Trump's election as president. Morgan Stanley announced last month that its subsidiary E-Trade would soon support trading in Bitcoin, Ethereum, and Solana. According to insiders, with Morgan Stanley lifting the eligibility requirements for cryptocurrency funds, the company will rely on automated monitoring processes to ensure clients do not become overly concentrated in volatile asset classes.