Key points:
- South Korea’s KOSPI Composite Index gained nearly 1.8% on Monday after last week’s tech-driven losses.
- Markets have priced out two further interest-rate hikes by the Federal Reserve in 2026, seeing 75% odds of only one 25-basis-point hike by the end of the year.
- Bitcoin delivered a weekly close below key local support after the Coinbase Premium Index hit -0.14, its lowest level since late June.
Asia leads equities bounce ahead of tech earnings
A lighter week of US macro data prints will shift the market’s attention to corporate earnings as stocks rebound from last week’s sell-off. Around 15% of S&P 500 companies are due to report Q3 earnings figures in the coming week, including SpaceX on Tuesday and Tesla and Meta on Wednesday.Tech-stock performance remains in focus after a major drawdown last week that began with South Korean markets. The KOSPI Composite Index lost 2.8% on Oct. 12 before dropping to the week’s low of 5,455 points on Thursday, bringing the week-to-date losses temporarily to 17%. 
Contagion spread to neighboring Asian markets before US equities began to experience weakness later in the week. The S&P 500 finished Friday down 2% for the week.
As in early August, tech stocks saw considerable sell-side pressure amid concerns over AI expenditure plans and the associated debt obligations. In Korea, the threat of competition in semiconductor manufacturing from China exacerbated the downturn.
Warnings of a “Black Monday” event on global stock markets spread through social media over the weekend. The panic, which coincided with the 39th anniversary of the 1987 Black Monday crash, appeared misplaced, with KOSPI gaining 1.8% on Monday and S&P 500 futures 0.7% higher at the time of writing.
Commenting on the disconnect between public sentiment and market performance, market commentator The Kobeissi Letter suggested that stocks should outperform based on investor demand. Persistent high US inflation and a global energy crisis have positioned equities for a surge on any potential signs of conditions improving.
“All while the AI Revolution continues to accelerate and many large-cap technology stocks become cheaper on a forward earnings basis, even as their stock prices rise. And in the background, the demand for asset ownership is historically robust,” it summarized in analysis last week.
Kobeissi noted that while tech giants led S&P 500 strength, 80% of index stocks are trading at least 10% below all-time highs.
Fed rate-hike bets cool despite inflation data overshoot
Ahead of the Federal Reserve’s next decision on interest-rate changes on Oct. 28, markets have tempered their expectations on policy tightening.Data from CME Group’s FedWatch Tool shows 85% odds of rates staying within their current 3.75-4% range in October. The Fed’s December meeting, meanwhile, carries just 11% odds of a further pause. Instead, markets see a 75% chance of a 25-basis-point hike, with a 50-basis-point move attracting 13% odds.
In a discussion with International Monetary Fund Managing Director Kristalina Georgieva last week, Fed chair Kevin Warsh avoided any hints of forward guidance on policy, reinforcing a pledge made at the Jackson Hole economic symposium in August.
“I don’t prejudge meetings. I don’t believe in saying now what I might do at the meetings that we have in the balance of this year,” he said.
Markets, however, interpreted the lack of information as a dovish signal, doubling down on the Fed hiking rates just once more before 2027.
Adopting a cautionary tone, meanwhile, market commentator Mosaic Asset Company saw inflation trends forcing the Fed to avoid easing off, keeping a crypto and risk-asset headwind in place.
“While investors expect the Federal Reserve to hold rates steady at its next meeting later this month, a growing inflation problem will keep favoring tighter monetary policy,” it wrote in analysis on Sunday.
The September print of the US Producer Price Index (PPI) released last week showed the ongoing impact of the Middle East crisis on fuel prices. PPI delivered its largest month-on-month increase since March 2022 at 1.7%.
“Half of the September increase in the index for final demand goods can be traced to prices for gasoline, which jumped 20.3 percent,” the Bureau of Labor Statistics reported.
Fuel also accounted for more than half of the September increase in the Consumer Price Index (CPI), which beat expectations by 0.1% to hit 3.7% year-on-year.
BTC price analysis sees more $80,000 support retests
Bitcoin price action completed a weekly candle close below a key support zone of interest between $82,500 and $82,800.Related: Bitcoin, Ether ETFs shed $549M as October ETH outflows near $1B
The weekly close came in at $82,000, a move that crypto trader and analyst Rekt Capital warned could spark further retests of the $80,000 mark in the future.
“Such a Weekly Close would position Bitcoin for a potential bearish retest of ~$82500 into new resistance. And if that bearish retest occurs successfully then it could set price up for a drop below $80k within the next few weeks,” he wrote in analysis on X.
Previously, Cointelegraph reported on September’s local high near $87,000 now hosting multiple resistance components, including the 2026 yearly open and its 20-month simple moving average (SMA).
In its latest market overview, onchain analytics platform CryptoQuant flagged declining US investor demand as a reemerging BTC price headwind this month. The Coinbase Premium Index, which measures the difference in price between Coinbase’s and Binance’s BTC/USDT pairs, fell to -0.141 on Oct. 18, its lowest levels since June 30.
“This reading is particularly significant. If the index remains in negative territory, it could indicate insufficient demand to absorb selling pressure, potentially increasing the likelihood of a continued price correction in the short term,” CryptoQuant commented.
The lack of demand contrasts with BTC/USD holding gains made since the end of June, having bounced from new multiyear lows under $58,000 on July 1.