This Market Selloff Has Engulfed Stocks, Crypto, Gold. How the Fed Can Stop It.

(YASIN AKGUL/AFP via Getty Images)

“In a crisis, all correlations go to one” goes the old market saying. While it’s not quite crisis time yet, a bout of market fear can still cause plenty of damage—and that will put pressure on the Federal Reserve.

Cryptocurrencies continue to be the market’s leading indicator of risk appetite and Bitcoin crashed to a more than six-month low Monday. Perhaps more surprisingly, gold also fell. The precious metal’s reputation as a haven might be overblown considering the influx of retail traders investing in gold via exchange-traded funds, making it vulnerable to pullbacks.

It’s the same story for the stock market. The S&P 500 broke below its 50-day moving average for the first time in 139 trading sessions Monday. While previous dips have looked like rotations away from tech, the worrying sign was that 407 of the index’s constituents fell.

Some concerns look valid. Artificial intelligence investment is increasingly expensive, with the likes of Amazon, Google, Meta, and Microsoft using around 95% of operating cash flows on capital expenditures, buybacks, and dividends. That compares with around 80% in 2019, according to Goldman Sachs. It’s partly why they are having to increasingly turn to debt to fund the data center buildout—Amazon just raised $15 billion from its first U.S. dollar bond offering in three ​years. AI sentiment will be tested again with Nvidia’s earnings Wednesday.

But ultimately the fate of the AI trade and the wider market lies with the Fed—with the chance it will pause its rate-cutting cycle in December now seen at just over 50%, according to the CME FedWatch tool. Policymakers continue to be divided, with Fed governor Christopher Waller publicly backing a cut while Fed Vice Chair Philip Jefferson preaching caution in remarks on Monday, ahead of September’s delayed jobs report release on Thursday.

The Fed is walking a thin line but it’s likely to come under increased political pressure if the selloff continues, with the Trump administration eager to install a central bank chair more sympathetic to lowering rates. That could open the door to a significant rebound.

“Never let a good crisis go to waste” is another old saying worth bearing in mind.

—Adam Clark

*** What’s Ahead for Markets in 2026? From “Liberation Day” tariffs to torrid rallies in AI stocks and gold, this year has been full of surprises. Join us on Dec. 11 at noon for discussions with investment strategists and money managers about the outlook for the economy and markets in 2026—and how to position your portfolio for success. Sign up here.

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Crypto Caught in Broad Market Selloff in Risk-Off Move

Crypto was caught in a broad market selloff that dragged everything from Bitcoin to gold to Big Tech stocks lower as investors dumped riskier assets. The selling in stocks was broad, with only two sectors, utilities and communications services, rising. It was the worst three-day stretch for the Dow since April.

• Bitcoin’s price slid below $92,000 and was 16.7% lower than its 200-day moving average for the first time since Dec. 22, 2022, according to Dow Jones Market Data. The proxy for investors’ risk appetite has had a bad stretch after topping $126,000 in October.
• Bitcoin was falling amid lower expectations that the Federal Reserve will cut interest rates in December. The probability of a quarter-point rate cut is now 42.9%, according to the CME’s FedWatch tool. The selling even hit haven assets such as gold, which fell more than 1% on the spot market.
• Crypto-related companies Strategy and Coinbase Global often offer clues to Bitcoin’s direction. Stocks of both fell on Monday. Strategy, the largest corporate Bitcoin holder, said it purchased 8,178 Bitcoin last week, for $836 million, the most since July.
• Tech stocks, which often trade in tandem with cryptos, also swooned, with the Nasdaq dropping 0.8% to extend losses for another day. It is now down six out of the last eight trading sessions, according to Dow Jones Market Data, and is down more than 4% for the month.

What’s Next: Tech was weaker as investors prepared for earnings from Nvidia, the artificial intelligence chip maker that has often dominated the rally in the sector up until recently. But now investors are worried about valuations and the lasting strength of the AI trade, and whether AI spending will hold up.

— George Glover, Karishma Vanjani, and Janet H. Cho

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Food, Restaurant Companies Feeling Relief from Tariff Exemptions

Food companies and restaurants are feeling some relief after the Trump administration exempted hundreds of imported agricultural products from tariffs, ranging from beef to coffee and coconuts. Packaged food makers and restaurant chains have seen substantially higher input costs in the past few months.

• The Food Industry Association, representing grocers and food wholesalers, said the administration’s exemptions are a critical step to ensure continued adequate supply at prices consumers can afford. The National Restaurant Association also said it would stabilize supply chains and ease cost-pressures.
• Beverage maker (and Barron’s stock pick) Vita Coco after the latest exemption that the average tariff rate for its products arriving in the U.S. is expected to decrease from the previously announced 23%, to about 6% based on current sourcing and product mix.
• Chili’s Grill & Bar owner Brinker International said tariffs have boosted commodity costs more than expected in 2025 and started to pinch its profit. The restaurant operator raised prices in October and said it anticipates doing it again in January. The tariff rollback would reduce those cost pressures.
• President Donald Trump spoke about affordability to a group of McDonald’s franchise owners late Monday. He said his administration was ending the affordability crisis, pointing to a 14% drop in the price of breakfast items, such as bread, eggs, and dairy, in the past six months.

What’s Next: Chocolate giant Hershey estimated 2025 tariff costs of up to $170 million. But cocoa isn’t grown in the U.S. Now it is exempted, and cocoa prices have retreated from a December 2024 high. JPMorgan analysts said tariff relief could add $1 to Hershey’s per-share earnings in 2026.

— Evie Liu and Liz Moyer

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The U.S.-China Trade Deal Is Fragile. Soybeans Are a Sign.

Signs are already pointing to the shakiness of the trade detente President Donald Trump and Chinese leader Xi Jinping struck in late October. The U.S. and China are intensifying their efforts to reduce their vulnerabilities, and there are indications that some commitments under the deal might not be fulfilled.

• China, for example, has bought only a little of the soybeans the U.S. says it had agreed to purchase by January. Both sides may hesitate to push too aggressively given China’s weak economy and next year’s midterm elections in the U.S. That has kept the deal on track.
• Based on Department of Agriculture data, China has bought 332,000 metric tons of soybeans from the U.S. since late October, just under 3% of what Washington said it pledged to buy. Beijing resumed purchases after halting them amid the trans-Pacific trade battle, and it was a major milestone.
• Flare-ups are still possible. China agreed to pause an expansion of export controls on rare earths, but the Chinese Ministry of Commerce is hiring at its fastest rate since 2002 for those in charge policing these restrictions, says Jack Burnham, a China analyst at the Foundation for Defense of Democracies.
• A task force including Lockheed CEO James Taiclet and co-chaired by Commerce Secretary Gina Raimondo and Justin Muzinich, a deputy Treasury secretary in the first Trump term, issued a blueprint for the U.S. to bolster its economic security.

What’s Next: Over the past decade, Beijing has spent $900 billion on artificial intelligence, quantum computing, and biotech. That is triple the amount the U.S. has laid out. Raimondo called the situation far from hopeless, noting that there is bipartisan recognition of the problem. For more on this read here.

— Reshma Kapadia

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Novo Nordisk, Eli Lilly Competing For Cash Customers

Novo Nordisk is undercutting its rival in the red-hot weight-loss drug business, battling Eli Lilly to win the direct-to-consumer market even before the Trump administration’s lower costs for the blockbuster drugs Wegovy and Zepbound take effect. Novo and Lilly increasingly see direct sales as part of their strategies.

• Novo Nordisk will offer starter doses of Wegovy for $199 a month through March, and then the cost for cash buyers will be $349 a month, which is $10 lower than what it previously charged. Starter doses of Lilly’s Zepbound are $299 a month.
• The Trump administration’s lower priced Wegovy and Zepbound will be made available to cash buyers through the TrumpRx website as early as January. Lilly has said its Zepbound won’t cost more than $449 a month for cash customers. Direct sales cut out insurers and pharmacy-benefit managers.
• Because insurance coverage is limited for weight-loss drugs, Novo and Lilly see direct-to-consumer sales as a way to get around the managed care limits. The White House has also cleared the way for Medicare to cover the drugs.
• Before those agreements, Lilly and Novo both charged $500 a month for most dosages to cash buyers. Lilly CEO David Ricks appeared to suggest on a recent podcast that the strength of the direct-to-consumer weight loss business could allow Lilly to grow through future patent expirations.

What’s Next: Novo said patients can buy Wegovy through its Wegovy.com website for pickup at pharmacies across the country, through direct-to-consumer telehealth pharmacies including NovoCare, or through other participating organizations, telehealth providers, and retailers.

— Josh Nathan-Kazis and Janet H. Cho

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Callum Keown