Risk sentiment deteriorated sharply on Thursday despite federal agencies reopening after the longest government shutdown in U.S. history, as investors aggressively repriced Fed rate-cut expectations following a wave of hawkish remarks from central bank officials.

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Several Fed members struck a cautious tone on inflation. Boston Fed President Susan Collins, a voting member of the FOMC, said there remains a "high bar" for additional policy easing, while Minneapolis Fed's Neel Kashkari argued inflation "is still too high at 3%."

San Francisco Fed President Mary Daly added that policymakers "still have work to do" to bring inflation back to the 2% target.

The comments prompted a sharp pullback in rate-cut bets. Market-implied odds of a 25-basis-point rate cut in December fell below 50%, effectively turning the decision into a coin toss, a degree of uncertainty weighing on markets.

Traders also adopted a cautious stance ahead of a busy week of economic releases that could shape expectations for December's policy meeting. Yet, some key reports may remain delayed or incomplete.

White House Press Secretary Katherine Levitt said the October CPI and jobs data are unlikely ...