According to Reuters, European markets were set for sharp losses, with EURO STOXX 50 futures down 1.4% and FTSE futures falling 1%, while US equity futures gained 0.2% in Asian trading.

US stocks dropped overnight as concerns about overstretched valuations in major tech names outweighed Nvidia’s strong earnings and guidance.

The Nasdaq recorded its widest intraday swing since April 9, when US tariffs under the Trump administration unsettled markets.

US data showed job creation in September far exceeded expectations.

However, a higher unemployment rate and downward revisions to previous months complicated the outlook for the Federal Reserve’s December policy meeting.

Treasury yields eased as futures shifted to reflect a 40% probability of a December rate cut, up from 30% a day earlier.

Investors remained skeptical that the Fed would ease next month, given that the next employment report will be released only after the meeting.

MSCI’s broadest Asia-Pacific index outside Japan fell 2.2% and was down 3.5% for the week, its steepest drop since early April.

Japan’s Nikkei slid 2.2%, leaving it 3.3% lower for the week.

Taiwan shares fell 3.4% and South Korea’s benchmark dropped 3.7%.

Chinese markets also weakened, with the CSI 300 and Hong Kong’s Hang Seng Index both down 1.5%.

“There is no doubt that the US tech sector has many bubble-like characteristics, but this does not mean that prices have to pop,” said Diana Mousina, deputy chief economist at AMP.

“The bubble could just deflate a bit.”

Mousina added that with the US government shutdown resolved and concessions emerging from the Trump administration on tariffs, US equities often perform well in November and December due to seasonal patterns.

Federal Reserve officials maintained a cautious stance on inflation overnight.

Some warned about emerging risks to financial stability, including the possibility of a sharp correction in asset prices, as policymakers debated the timing and necessity of further rate cuts.

Cleveland Fed President Beth Hammack said reducing rates at this stage carried significant risks.

Fed Governor Lisa Cook noted concerns about the potential for sharp asset price declines.

Japan unveiled a major fiscal package on Friday.

Prime Minister Sanae Takaichi’s cabinet approved a 21.3 trillion yen ($135.5 billion) stimulus plan, her first large-scale economic initiative since taking office.

Concerns about fiscal expansion pressured the yen, which weakened to 157.24 per dollar, hovering near a 10-month low.

The currency’s 6% slide this quarter has fueled expectations of potential government intervention.

Bond markets stabilized after Takaichi said overall issuance of Japanese government bonds would be lower than last year.

Ten-year JGB yields slipped 3 basis points to 1.785%, pulling back from a 17-year high of 1.835%.

Japan’s core consumer prices rose 3% in October, sustaining expectations of a possible near-term rate increase.

Bank of Japan Governor Kazuo Ueda said the central bank would assess the “feasibility and timing” of a rate hike at upcoming meetings.

“If the Japanese yen remains weak and forthcoming data confirm economic recovery and rising inflation, we think the BOJ will act, basing its decision on data and maintaining independence from political influence,” said Min Joo Kang, senior economist at ING.

US Treasuries steadied after gains overnight.

Two-year yields held at 3.545% after a 4-basis-point drop, while the 10-year yield was little changed at 4.0922% after slipping 3 basis points in US trading.

Oil prices extended losses as Washington pushed Kyiv to consider a peace agreement with Russia.

US West Texas Intermediate crude fell 1.2% to $58.29, down 3% for the week. Spot gold eased 0.5% to $4,055 per ounce after little movement overnight.