TRADING DAY
Deciphering the forces driving global markets
Jamie McGeever is enjoying a well-deserved rest, but the Reuters markets team continues to bring you the latest financial news. America’s largest banks will report their third-quarter results on Tuesday, leading the parade of S&P 500 results that will stretch over the coming weeks. Please send me your comments at Alden.Bentley@thomsonreuters.com
Essential readings of the day
- Trump on way to meet Xi in South Korea, says Bessent
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Wall Street rebounds after Trump’s statements on China; Broadcom surge
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How the United States is absorbing Trump’s tariffs
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Gold Breaks $4,100 and Hits High, Buoyed by Trade Tensions and Rate Cut Optimism
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JPMorgan to invest up to $10 billion in US national security as part of $1.5 trillion commitment
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Oil rises as US, China attempt to ease trade tensions
Key market movements today
SHARES: The main US indices rebounded strongly, driven by semiconductor makers like Broadcom and technology stocks linked to artificial intelligence, after President Donald Trump adopted a more conciliatory tone, allaying fears of a trade war with China. The S&P 500 rose 1.6% at the end of the session. The Nasdaq gained 2.2%.
SECTORS: Information technology is the best performing sector in the S&P 500 today, closely followed by consumer discretionary.
CURRENCIES: The US dollar stabilized after Donald Trump reduced trade tensions with China, while political developments in France and Japan weighed on the euro and yen.
BONDS: Bond markets were closed for Columbus Day.
COMMODITIES: Oil prices rebounded from five-month lows reached on Friday, as talks between Donald Trump and Chinese President Xi Jinping, scheduled for late October, appeared to be back on the agenda. Renewed trade tensions between the United States and China propelled gold above $4,100 an ounce for the first time.
CRYPTOASSETS: Friday’s sharp fall in cryptocurrencies represented the largest liquidation on record, surpassing $19 billion in leveraged positions, according to market participants. On Monday, bitcoin fell 0.60% to $114,375.22, while ethereum lost 0.54% to $4,120.42.
Key points of the day
Trump lightens the mood on China
As suddenly as Donald Trump’s now-familiar threat to impose 100% tariffs on China for limiting its exports of rare earths sent Wall Street plunging on Friday, Monday’s easing triggered a wave of stock buying, putting records back in sight.
Treasury Secretary Scott Bessent said on Fox Business Network that the president was again on track to meet with Chinese President Xi Jinping in South Korea later this month, as originally planned.
If Monday was an ordinary day for the stock markets, bond traders were off for Columbus Day and Indigenous Peoples’ Day. This federal holiday comes as many civil servants are already furloughed due to the extended shutdown, and some could lose their jobs when Congress ends the crisis and adopts a budget.
There are no signs that Democrats and Republicans will reach a compromise this week, meaning indicators like producer prices, retail sales and weekly jobless claims won’t be released, joining the list of important but likely outdated data, like September’s employment figures, that will be released en masse someday.
Tuesday, however, promises to be lively with the publication of results from JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo, which open the third quarter results season. The Chairman of the Federal Reserve, Jerome Powell, will also speak in Philadelphia on the economic situation and monetary policy, while investors, deprived of data, will closely follow his indications on a possible new monetary easing, or not, from the Fed, in the absence of recent information on the economy.
Gold: the safe haven
Gold is undoubtedly the main beneficiary of the rise in tensions between Donald Trump and Xi Jinping. It surpassed $4,100 an ounce for the first time on Monday, even after the lull, with traders banking on further rate cuts from the Fed by the end of the year, which would make the metal, without yield, more attractive. With central banks buying and investors turning to ETFs, the positive factors appear sufficient to support the rise. Silver also hit a record high above $52 an ounce.
What could drive the markets tomorrow?
- Results from JPMorgan, Goldman Sachs, Citigroup and Wells Fargo
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Fed Chairman Jerome Powell’s Speech on Monetary Policy and the Economy
The opinions expressed are those of the author. They do not reflect the position of Reuters News, which, according to the Trust Principles, is committed to integrity, independence and freedom from bias.
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