Global markets volatile as gold and silver plunge, with Fed rate hikes still in focus

Huo Xing Finance reports: On October 31, global financial markets experienced heightened volatility this week. Gold and silver plunged significantly, while Brent crude oil is poised for a fifth consecutive weekly gain. U.S. tech stocks faced concentrated selling pressure, with AI capital expenditures and cash flow concerns becoming the market’s focal point. The Federal Reserve held interest rates steady, but Chair Walsh did not rule out a December rate hike, further widening market分歧 on the future path of monetary policy. In precious metals, spot gold closed Friday at $3,876.89 per ounce, down 6.7% for the month; silver closed at $49.13 per ounce, with a monthly decline exceeding 18%. Stronger-than-expected U.S. economic and inflation data reinforced expectations of prolonged high rates, with rising real yields continuing to suppress gold and silver prices. In oil, risks of supply disruptions in the Middle East supported prices, with Brent crude on track for its fifth straight weekly gain. In U.S. equities, enthusiasm for AI-related trading has clearly cooled. The Nasdaq and S&P 500 indices fell for a third consecutive week, with the Nasdaq down 5.3% for October—the worst monthly performance since March 2025. Alphabet plunged as much as 13% amid concerns over capital spending and cash flow, while Intel tumbled 28.58% on Friday, marking its worst single-day decline since 1974. Apple’s closing market capitalization rose to $5.03 trillion, surpassing NVIDIA’s $4.93 trillion and reclaiming its position as the world’s most valuable publicly traded company. On monetary policy, the Federal Reserve voted 10-2 to hold rates steady this week, with two officials advocating for a 25-basis-point hike. Chair Walsh noted that U.S. economic growth remains robust, but inflation has remained above target for nearly six years; future policy will depend on incoming economic data. U.S. core PCE inflation rose 3.1% year-over-year in September, and Q3 GDP grew at a 3.4% annualized rate. CME data shows the market currently assigns a roughly 75% probability to a 25-basis-point Fed rate hike in December. On the international front, U.S.-Iran diplomatic efforts continue, with Qatar proposing a seven-day ceasefire plan. However, significant disagreements remain over sanctions, port blockades, the Strait of Hormuz, and Iran’s nuclear program. Meanwhile, the U.S. is still discussing the possibility of resuming military strikes against Iran, meaning Middle East supply risks have not dissipated. In the AI industry, capital expenditures and funding pressures have become key market concerns. Meta announced a potential equity financing plan of up to $97.5 billion; SpaceX raised approximately $40 billion through equipment leasing arrangements; Oracle expects it may need up to $20 billion in external financing by fiscal year 2030. Anthropic publicly filed its IPO documents, disclosing $16.3 billion in revenue for the first half of 2026 and long-term commitments for computing power and infrastructure totaling approximately $637 billion. The semiconductor sector continues to be driven by AI demand. SK Hynitz reported a 632% year-over-year increase in operating profit for Q3; Samsung Electronics’ semiconductor division posted an operating profit of 106.5 trillion won; SanDisk recorded a 378% year-over-year revenue increase for its first fiscal quarter of 2027. However, this week’s sharp sell-off in tech stocks indicates that markets are increasingly focusing on whether AI investments can translate into actual profitability and free cash flow.