Oct 6–12, 2025

Stocks

Weekly market direction:
Markets finished the week in a volatile pattern, with calm mid-week trade giving way to a sharp risk-off episode on Friday after renewed threats of large tariffs between the U.S. and China. The S&P 500 (~-1.5% w/w), the Nasdaq Composite (~-2.3% w/w), and the Dow Jones Industrial Average (~-1.0% w/w) each recorded swings that reflected both earnings momentum and the sudden geopolitical repricing. The tariff rhetoric sparked broad selling late in the week, and then markets partially recovered once headlines softened, leaving a net negative weekly outcome but also higher realized volatility.

Context and drivers:
The key narrative was simple and then quickly urgent: tentative optimism on growth and corporate earnings through the first half of the week met an abrupt policy shock when Washington and Beijing traded threats—most notably a pointed U.S. warning of sweeping tariff measures in response to China’s export controls, and a rapid market reaction that showed how sensitive risk assets remain to trade policy. Consequently, risk premia widened on Friday, liquidity thinned in some venues, and large-cap leadership briefly gave way to a sell-first, ask-questions-later dynamic. Markets then digested subsequent communications that reduced the immediacy of escalation, which helped risk assets regain some ground on Monday.

Sector and single-name action:
Technology and AI-exposed names had led through the week, and yet they were also the most sensitive to Friday’s repricing. Notable movers included Nvidia (~-3.4% w/w), which outperformed earlier but sold off sharply into Friday’s headline flow; Microsoft (~-1.8% w/w) and Apple (~-2.5% w/w) also saw intraday weakness before partial recovery; Amazon (+~0.9% w/w) held up better on constructive commerce and cloud signals earlier in the week; and Tesla (+~0.6% w/w) was relatively resilient on delivery-related optimism amid the broader risk reduction. While earnings beats sustained selective pockets of buying, the tariff headlines amplified correlation across risk assets during the flash decline.

Fixed-income:
Yields compressed into the Friday risk-off move, as investors sought safety and pushed out the timing for any material policy easing that would rely on a clearer macro path. The 10-year Treasury yield declined on the week as the safe-haven bid increased, and that compression supported duration-sensitive stocks during the mid-week rally but could reverse quickly should trade tensions force a growth re-assessment. In short, bond markets were central to the cross-asset repricing that unfolded late in the period.

Precious metals, industrial metals

Gold and silver response:
Safe havens performed well during the risk spike. Gold (~+5–7% w/w) rallied strongly as investors sought protection from policy and trade uncertainty; Silver (~+4–6% w/w) rose in sympathy and on some marginal industrial demand narratives. The metals rally underscored the classic hedge role of bullion during sudden geopolitical or policy dislocations, and inflows into bullion-related ETFs were a visible technical tailwind.

Industrial metals:
Base metals were mixed across the week. Copper (~-0.5% w/w) and Aluminium (flat to ~-0.2% w/w) traded under two competing forces: softer risk appetite late in the week and lingering hopes for demand stabilization from China. That combination left the industrial complex range-bound overall, with participants leaning on regional manufacturing data and trade-flow headlines for direction.

Energy and commodities:
Oil reacted to the risk repricing as well: oil prices fell on the trade escalation because of concerns about global demand, while concurrent inventory updates and OPEC+ commentary complicated the narrative. As a result, energy equities underperformed on the Friday risk event but recovered somewhat as headlines moderated.

Crypto Assets

Bitcoin:
Bitcoin (BTC, intraday plunge >13% on Friday; weekly net ~-9% w/w) led the risk-asset unwinding and was hit hard by the tariff rhetoric and related liquidation cascades. The intraday move on Friday was dramatic: leverage was quickly unwound across derivatives markets, and BTC experienced one of the largest single-day percentage moves of the year before partial rebound during subsequent sessions. The episode highlighted crypto’s sensitivity to sudden macro shocks and concentrated liquidations in leveraged positions.

Ethereum:
Ethereum (ETH, intraday fall ~7–11% on Friday; weekly net ~-11% w/w) suffered even larger percentage moves in some windows, as ETH’s volatility and derivatives structure amplified downside momentum. Liquidations reported during the same period were substantial, and ETH’s larger percentage drawdown versus BTC underlined the heightened speculative positioning in the altcoin complex going into the event. Subsequent rebounds were meaningful but left weekly performance materially negative.

XRP:
XRP (~-6% w/w) moved lower alongside broader altcoin risk, but the token’s price action was more muted relative to the largest cryptos. XRP’s volumes saw episodic spikes on partnership-related chatter, yet the overall weekly tone reflected de-risking across the crypto space.

Solana:
Solana (SOL, ~-12% w/w) was notably volatile and underperformed during the sell-off; SOL’s higher beta to risk sentiment drove outsized intraday losses, and the token’s liquidity profile exacerbated the speed of the decline in certain venues.

Cardano:
Cardano (ADA, ~-7% w/w) declined as well, supported only by sporadic long-term accumulation interest. ADA’s drop mirrored the broader trend among mid-cap and smaller altcoins during the Friday deleveraging.

Crypto market context:
Across tokens, the common drivers were sudden sentiment reversal, forced deleveraging in futures and perpetual swaps, and the cascade of liquidations that follows a leveraged unwind. While some coins staged technical bounces after the initial shock, the week closed with net losses and with heightened attention on margin risk and exchange-level liquidity management.

US economic data

Calendar and the data blind spot:
This week’s macro calendar included several regional surveys and private indicators that investors used to substitute for delayed official releases. Notably, markets responded to private payroll trackers, consumer confidence snapshots, and manufacturing prints that painted a mixed picture: some components showed softening, while services activity generally held up better. The delayed official employment release and the broader uncertainty around trade policy left the Fed’s data path less transparent, and that uncertainty was an important amplifier of market volatility.

Inflation and labor signals:
On balance, services inflation components remained sticky, while goods inflation softened in certain categories. Labour-market internals suggested moderating hiring intensity in parts of the economy, but not a sudden deterioration. Given the data environment and the geopolitical headlines, markets priced an elevated probability of economic downside scenarios in the near term while still leaving room for the Fed’s data-dependent approach.

Market reaction:
Consequently, bond yields compressed as cash and high-quality paper attracted flows, precious metals strengthened as portfolios hedged, and risk assets — particularly highly leveraged pockets of crypto and some small-cap equities — experienced outsized losses during the Friday unwind. Equity leadership remained concentrated among large, high-quality tech franchises that have clearer earnings visibility, though even those names were not immune to headline risk.

Outlook — coming week

Immediate calendar and event risk:
Watch for any developments in the U.S.–China dialogue, including clarifications of tariff intentions and any moves or countermeasures that Beijing may announce. In addition, the re-scheduled official employment data, upcoming consumer inflation components, and regional manufacturing updates will be focal points. Because one side’s statement or formal announcement can swing sentiment, each release now has a larger-than-normal market impact window.

Tactical posture:
Given the renewed trade policy shock and its demonstrated capacity to trigger rapid de-risking, favor a cautious and selective positioning. Specifically, maintain core exposure to high-quality growth names with strong cash flows, keep a tactical allocation to liquid hedges such as Gold and short-dated Treasuries, and reduce size in highly leveraged or illiquid risk exposures. For crypto, emphasize core holdings of BTC and ETH if you have long-term conviction, but reduce leverage and increase stop discipline for tactical positions.

Risk scenarios:
If tariff rhetoric escalates further and turns into a sustained policy campaign, the likely outcomes include downward pressure on global growth forecasts, a multi-quarter hit to manufacturing and trade flows, and a potential rotation from growth back to defensive and inflation-sensitive assets. Conversely, if diplomatic channels successfully de-escalate tensions, then the repricing could reverse rapidly and restore the mid-week momentum that had supported equities and risk assets.

Summary

The week was a reminder that policy headlines — and specifically the return of trade-policy threats between the U.S. and China — can still trigger rapid cross-asset repricings. While corporate earnings and longer-term tech narratives remain constructive, headline risk re-introduced liquidity and leverage as focal vulnerabilities. Going forward, managers should prioritize liquidity, defined risk, and scenario planning because the calendar now contains asymmetric event risk that can manifest quickly.