Daily Market Wrap – Risk Sentiment Fades on U.S.–China Trade Strains and Policy Uncertainty

Index Update:  U.S. stock futures declined on Tuesday, with the S&P 500 and Nasdaq 100 down over 1% and Dow futures off about 280 points, as optimism over U.S.–China trade relations faded amid new port fees and fresh Chinese sanctions on U.S. subsidiaries of Hanwha Ocean. Early bank earnings delivered mixed reactions—JPMorgan was flat, BlackRock and Goldman Sachs slipped despite beats, and Johnson & Johnson traded steady after strong results and a planned business spin-off—while Wells Fargo gained 2.3% on higher profits.

Market Movers:  On Monday, the top gainers were Solidion Technology, Inc. (+293.90%), followed by ESS Tech, Inc. (+117.55%). On the contrary Tvardi Therapeutics, Inc. (-83.92%), and Yunhong Green CTI Ltd. (-34.33%) declined the most the same day.

Commodities Update:  Oil prices tumbled to five-month lows on Tuesday, with WTI down 2% to $58.3 and Brent below $62 per barrel, after the IEA forecasted a widening supply surplus driven by OPEC+ output increases and robust production from the Americas. The agency also cut demand growth estimates to 700,000 bpd for 2025 and 2026, warning of rising global inventories, while OPEC maintained a more optimistic outlook. Meanwhile, escalating U.S.–China trade tensions and broader market risk aversion deepened selling pressure. In contrast, gold surged to a new record high of $4,140 per ounce as investors sought safety amid trade frictions, a prolonged U.S. government shutdown, and growing expectations of imminent Fed rate cuts.

Macro Updates:  U.S. Small Business Optimism Slips Amid Inflation and Supply Chain Woes

The NFIB Small Business Optimism Index dropped to 98.8 in September 2025, its first decline in three months and below expectations, reflecting weaker confidence among small business owners. Rising inflation and persistent supply chain disruptions were key concerns, cited by 14% and 64% of respondents, respectively. Despite these challenges, earnings improvements reached their highest level since December 2021, and businesses remained generally resilient, though cautious amid economic and policy uncertainty.

Dollar Steady as Markets Await Powell’s Speech and Track U.S.–China Trade Tensions

The U.S. dollar index held near 99.3 on Tuesday, showing little movement as investors awaited Fed Chair Jerome Powell’s remarks for clues on upcoming rate cuts amid a prolonged government shutdown and limited economic data. Markets expect another 25-basis-point cut this month and a similar move in December. Attention also remained on U.S.–China trade tensions, with China imposing new restrictions on U.S. subsidiaries of Hanwha Ocean ahead of a potential Trump–Xi meeting later this month.

Bonds Commentary:  U.S. Treasury yields fell on Tuesday, with the 10-year dropping to 4% and the 30-year hitting its lowest since April at below 4.6%, as investors weighed renewed U.S.–China trade tensions, the ongoing government shutdown, and anticipation of Fed Chair Powell’s remarks for rate-cut clues. The trade dispute escalated with new port fees and China’s rare earth export curbs, though President Trump later softened his tone. With limited economic data due to the shutdown, markets focused on bank earnings and continued to price in two Fed rate cuts this year.

Futures Update:  U.S. stock futures declined on Tuesday, reversing part of the previous session’s gains, as investors weighed renewed U.S.–China trade tensions, upcoming bank earnings, and remarks from Federal Reserve officials. S&P 500 futures were down 1.0%, Nasdaq futures 1.3%, and Dow futures 0.6%

Following an initial surge early in the session, stocks maintained a strong upward momentum throughout Monday's trading day. The S&P 500 climbed by 102.19 points, or 1.56%, closing at 6,654.71. From a technical standpoint, there is a potential for the index to experience a volatile session with bearish tendencies. Additionally, the 14-day Relative Strength Index (RSI) is close to the mid-point and may decline further, suggesting possible selling pressure. Support levels are approximately at 6,500, while resistance is expected near 6,700