What was once seen as a near-certain cut in interest rates next month now looks more like a coin flip as Federal Reserve officials sharply disagree over the economy’s health and whether stubborn inflation or weak hiring represent a bigger threat.

The S&P 500 dipped 0.8% while the tech-heavy Nasdaq fell 1.1% as investors panicked over whether AI firms have been overvalued – extending a rocky tech rout into its third week.

Fed rate-cut odds plunge as traders brace for volatility and shifting policy signals ahead of the FOMC minutes.

By Pablo Sinha (Reuters) -Gold prices rose from a one-week low on Tuesday, supported by soft U.S. employment numbers, while investors assessed the likelihood of a Federal Reserve interest rate cut in December ahead of more delayed U.

Philip Jefferson offered a case study in the central bank’s predicament Monday, acknowledging the risk of stubborn inflation and weaker employment conditions—dueling threats that call for opposing prescriptions.

While private surveys have pointed to a softening labour market, hawkish remarks from most Fed policymakers have dampened expectations of an interest rate cut in December. In a bright spot, Swiss drugmaker Roche Holding surged nearly 6% after reporting late stage trial results for its breast cancer pill giredestrant.

Gold prices fell to their lowest levels in more than a week on Tuesday as fading bets on a Federal Reserve interest rate cut next month dented demand ahead of delayed U.S. economic data releases this week.

Strategists at Bank of America warn that the optimism expressed by fund managers could provide an air pocket for stocks to fall into if the Federal Reserve doesn’t cut interest rates at its upcoming meeting.