Live updates: Bitcoin falls back to $81,000, with interest rates tumbling as stocks crack

Money is really pouring into fixed-income as stocks extend losses two hours before the close, with the Nasdaq down 2.55% and S&P 500 losing 1.35%.

The 10-year U.S. Treasury is now down a whopping 20 basis points on the session to more than a one-month low of 4.945%. The 2-year yield is off 18 basis points to 4.64%.

October Fed rate hikes odds are more or less zero at this point, and the odds of no more rate hikes at all this year have soared to 28% from 10%.

Of particular note, interest rates are tumbling even as the price of oil has jumped more than 3% today. These markets were nearly perfectly correlated throughout the summer and early fall, with each tick higher in oil resulting in a move upward in rates.

That correlation has completely broken of late as traders reassess the idea that higher oil prices are inflationary, and instead consider the deflationary impact of the current energy shock.

Bitcoin is near a session low, down 4.2% to $81,100. Ether and XRP are each down more than 5%.

“Iran is doing everything they can to drive up the price of Oil prior to the U.S. Midterm Election,” said the U.S. president minutes ago on Truth Social. “They are even making up fake hits, mines, and everything else, because more Oil is coming through the Hormuz Strait now than it did even prior to the beginning of the Conflict.”

Trump spoke as overnight strikes sent oil prices spiking more than 3%, helping push equity markets sharply lower.

With the midterm elections in less than two weeks, the odds of a Democrat sweep of both houses of Congress continue at contract highs of 67% on Polymarket.

Oil is soaring, and the U.S. inflation numbers are getting uglier. But the continued selloff in AI-related names and the ballooning French bond yields have investors pouring money into traditional safe havens — U.S. government bonds, among them.

That’s sent the U.S. 10-year Treasury yield down 13 basis points on Wednesday to about a one-month low of 5.02%. The 2-year yield is down 10.5 basis points to 4.718%.

The odds of a Fed rate hike at its policy meeting next week have shrunk to just 8% from 16% a day ago and 28% one week ago, per CME FedWatch.

Looking to the Fed’s subsequent meeting on Dec. 9, traders are beginning to pare bets on a rate hike then — even as a string of Fed speakers have insisted that one more rate hike in 2026 would be necessary.

The current odds that the Fed holds pat through year-end have risen to 16% from 10% one day ago and 10% one week ago.

U.S. initial jobless claims remained at historically low levels last week, dipping to 194,000 from 200,000 previously, and against market forecasts for 200,000.

The four-week moving average dipped to 197,750 from 198,750.

U.S. bond yields remain sharply lower this session, despite the solid economic news, as investors focus on steep declines in equity markets.

A renewed bout of hostilities in the Middle East has oil higher by nearly 3% on Thursday.

Following a bounce on Tuesday, South Korea’s Kospi fell 3.5% overnight. Meta and Tesla are each lower by about 3% after reporting third-quarter results after the Tuesday close.

Results from Lam Research (LRCX) seem to be spooking the chipmakers. The company topped fiscal first-quarter estimates, but said supply chain bottlenecks could hit the revenue outlook. The stock’s down 8% pre-market.

Nasdaq 100 futures are down 1.7% and S&P 500 futures are off 1% about 90 minutes before the market open.

French bond spreads are blowing out again, the 10-year OAT yield higher by 11.4 basis points to 5.11%, while the German 10-year Bund yield falls 7 basis points to 3.346%. The spread has widened to another 15-year high of 177 basis points.

Money is flowing into U.S. fixed-income, sending the 10-year Treasury yield down 10.3 basis points to 5.046% and the 2-year yield down 9 basis points to 4.733%.

Major crypto prices are down more than 2% across the board, with biticoin trading at $81,650.

The Japanese yen is rising against major fiat currencies, driving a larger drop in the bitFlyer-listed BTC/JPY pair.

The pair is down 3% versus 2.5% declines in BTC/USD pairs listed on major Western exchanges.

Some observers say a bullish chart pattern and the resulting unwinding of short bets on the currency drive the yen’s rise. Meanwhile, traders expect the Bank of Japan to hike interest rates in December.

Bitcoin squeezed short sellers on its way to nearly $85,000 late Wednesday, then wiped out bullish bets on the way back down to about $81,800. That’s a $3,000 round trip in under a day, and it left bitcoin down about 2% over 24 hours.

The damage shows up in liquidations, which are positions an exchange forcibly closes when a trader using borrowed money can’t cover their losses. About $431 million was liquidated over 24 hours, according to CoinGlass.

Roughly $173 million of that hit short sellers during the climb, and over the past 12 hours bullish bets made up $210 million of the $222 million wiped out. The biggest single hit was an $11.8 million bitcoin long on Binance, closed near $83,500.

HYPE fell 4.5% to about $78, DOGE lost nearly 4% and SOL dropped 3%. Ether slipped 2% to just under $2,400. XMR went the other way, jumping 11% to about $650, according to CoinDesk data.

The slide takes bitcoin below $82,500, a level some market watchers warn could open a path toward $70,000 if it breaks.

Tech gave it no help. Nasdaq 100 futures fell 1.1% after Tesla cut its spending forecast and Lam Research issued a weak outlook.