Market Recap - Friday, October 10, 2025
Markets Take a Dive After U.S.-China Tensions Flare Up Again
The week ended on a rough note for stocks:
Dow: -1.90%
S&P 500: -2.71%
Nasdaq: -3.56%
Russell 2000: -3.01%
This was the worst day for the S&P 500 since April, and all major indexes logged weekly losses.
The big drop was triggered by renewed tensions between the U.S. and China. President Trump posted online that China is being “very hostile” and warned of a “massive increase” in tariffs. He even said he may skip a planned meeting with China’s President Xi. These comments came after China moved to tighten exports of rare earths, began levying fees on U.S. ships, and started scrutinizing tech imports — all signs of escalating friction.
AI names, tech stocks, and consumer favorites took a beating. Semiconductors, banks, airlines, and energy names all sold off. Nvidia and Amazon were especially weak. On the flip side, safer areas like utilities, food & beverage, and telecoms held up better.
Gold rose 0.7% (back above $4,000/oz), crude oil dropped 4.2%, and Bitcoin slid 3.6%. Treasury yields fell as investors fled to safety.
Other Headlines
Fed Speak: Officials like Waller, Bostic, Daly, and Musalem reiterated support for cautious rate cuts, citing softening labor market trends.
Government Shutdown: Day 10 and still no resolution. Looks like the government may stay shut until at least Tuesday.
Consumer Sentiment: The University of Michigan’s preliminary read showed confidence holding steady in October. Inflation expectations edged slightly lower.
Earnings Season Incoming: Big banks kick off Q3 earnings next week. Expectations are cautiously optimistic, with focus on consumer health and AI investments.
Corporate Highlights
LEVI beat Q3 estimates and raised guidance but still dropped 12% — the bar was set high.
MOS fell nearly 10% after weak volume guidance.
VG plunged 25% on an arbitration loss related to LNG sales.
AMD/OpenAI/Nvidia headlines continue to dominate the AI chatter, but now there’s growing concern about circularity and profitability in the space.
LEN announced an exchange offer for shares in its recent MRP spinoff.
Fifth Third acquiring Comerica in a $10.9B deal — part of a trend of regional bank consolidation.
Here’s Our Take:
Today’s sell-off wasn’t just about trade tensions — it was the culmination of several simmering risks: geopolitical uncertainty, shutdown fatigue, concern over AI valuations, and extended stock positioning. Markets had been running hot, and Friday’s action looked like a reality check — especially for overbought tech names. While there’s still optimism around Q3 earnings and the Fed cutting rates, investors are being reminded that sentiment can shift fast when headlines hit. With earnings season starting next week and Fed Chair Powell speaking Tuesday, the next few days could set the tone for the rest of Q4. Stay tuned.
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