According to recent reports, the U.S. stock market has been affected by trade relations with China and is entering its third week of potential government shutdown after experiencing five days of volatility. As of last Friday's close, the S&P 500, tech-heavy NASDAQ Composite, and Dow Jones Industrial Average all achieved gains, concluding a tumultuous week. During this period, major indices showed daily fluctuations, with market sentiment influenced by a mix of bullish and bearish factors. In the coming week, investors will assess key economic data to gauge the economic outlook. The Consumer Price Index (CPI), originally scheduled for release on October 15, has been postponed to this Friday (October 24) due to the government shutdown, making it the last significant economic data before the Federal Reserve's monetary policy meeting on October 28-29. The market generally anticipates that the report will indicate a continued upward trend in prices, although the growth rate is expected to narrow compared to August. The data's performance will directly impact the Fed's interest rate decisions—officials have previously indicated that they are focusing on weakness in the labor market, but a rebound in inflation above expectations may force policy adjustments.
Due to the ongoing government shutdown, several economic data releases face uncertainty, including indicators such as import prices, retail sales, and unemployment claims which may be dropped from the schedule. Although new home sales data might be delayed, the market is still keenly awaiting the National Association of Realtors' September existing home sales report, looking for signs of recovery in the housing market. Additionally, this week will see the release of the latest Consumer Confidence Index and Purchasing Managers' Index (PMI) data, providing a broader economic picture.
This week marks the peak of the earnings season for U.S. companies. Following strong earnings reports from Wall Street banks, the "Big Tech earnings season" will kick off, featuring quarterly reports from renowned firms such as Tesla (TSLA.US), Intel (INTC.US), Netflix (NFLX.US), and Coca-Cola (KO.US). Tesla is scheduled to report its earnings this Wednesday, with prior strong delivery figures attributed to the impending expiration of electric vehicle tax credit policies. Ford (F.US) and General Motors (GM.US) will also report earnings this week, potentially benefiting from policy incentives, despite both companies scaling back their electric vehicle plans. Elon Musk may take the opportunity to share details on Tesla's advancements in autonomous taxi services, Optimus robots, and self-driving technology expansions.
Intel will release its earnings on Thursday, having significantly upticked its stock price after securing government stakes and completing transactions with NVIDIA. Following recent price hikes and increased revenue forecasts, Netflix's earnings report will be a litmus test for market reactions. The performances of Coca-Cola and Procter & Gamble (PG.US) may reveal shifting consumer spending trends, while HCA Healthcare's (HCA.US) earnings could reflect dynamics in the hospital sector.
Newmont Mining Corporation (NEM.US) will also release its earnings on Thursday, amid ongoing record-high gold prices. In addition, defense contractors Northrop Grumman (NOC.US) and Lockheed Martin (LMT.US), along with telecom giants T-Mobile (TMUS.US) and AT&T (T.US), are set to release their latest earnings, providing investors with diverse sector insights.
Market sentiment remains cautious amid fluctuating Trump administration policies and recent Chinese export restrictions targeting rare metals. Trump threatened to impose a 100% tariff on all Chinese goods in a recent post on Truth Social, only to retract the statement soon after. This series of actions has made the rare earth sector one of the market's biggest winners in the past two weeks, but increased volatility has occurred due to escalating trade tensions. In a later post, Trump accused China of stopping soybean purchases, labeling it as "economic hostility," while threatening a halt to U.S. purchases of Chinese cooking oils. When asked about the trade war, Trump bluntly stated that the U.S. and China are "in a trade war." However, he subsequently suggested that high tariffs on China were "unsustainable," complicating investors’ responses amidst frequent shifts in policy signals.
The complexity in supply chains intensifies as the White House officially approved Trump's October 6 announcement regarding the new tariffs on medium- and heavy-duty trucks—effective November 1, 2025, all imported medium and heavy trucks will face a 25% tariff, a point of contention among truck manufacturers like PACCAR (PCAR.US), who strongly oppose the exclusion clauses on auto parts. The new tariffs will cover all vehicles manufactured overseas, from vans to large trucks, with a maximum tariff rate of 25%; additionally, imported passenger cars will face a 10% tariff.
With increasing risk aversion in the market, gold prices have risen for the ninth consecutive week, trading at approximately $4,240 per troy ounce, showing no signs of slowing in the short term. Analysts at JPMorgan highlighted in a recent report that if 0.5% of U.S. assets held by foreign investors shifted to gold, prices could soar to $6,000, emphasizing the hedge value of hard assets amid trade tensions.
Expectations of global oil supply oversupply have been rising. On October 10, analysts at Macquarie Bank noted that the oil market is still in a range-bound position, exhibiting structural spot premium characteristics, while crude oil prices have yet to fully reflect expectations of significant oversupply. However, signs of a shift are beginning to emerge. The market will closely follow upcoming earnings reports from major energy companies like ExxonMobil, Chevron, EQT, and Halliburton.
As of last Friday, crude oil prices fell for the third consecutive week, with global benchmark Brent crude futures dropping about 2.3%, and U.S. WTI crude futures falling by 2.8%. This round of price declines is driven by multiple factors, notably the continued increase of production targets by OPEC+ led by Saudi Arabia, which agreed to boost daily output by 137,000 barrels in November. Member countries, particularly Saudi Arabia, are trying to reclaim market share through increased production.
Additionally, monitoring data from maritime oil tankers shows that the current oil storage on tankers has exceeded 1 billion barrels, marking the highest levels since the oil supply was stranded offshore due to the pandemic in 2020, further intensifying oversupply expectations. Easing geopolitical tensions in the Middle East also weigh on oil prices. The temporary peace agreement between Israel and Palestinian Hamas, facilitated by the Trump administration, has taken effect, including prisoner exchange terms. Should the regional situation remain stable, Iran may resume its production ramp-up plans, leading to further increases in market supply.
The latest forecast from the International Energy Agency (IEA) indicates that the surplus of oil will widen to 4 million barrels per day by 2026, up from the previous estimate of 3.3 million barrels per day, corresponding to nearly 4% of global demand, adding further pressure on oil prices. Analysts explain that despite the likelihood of not seeing greater declines, the accumulated excess inventory throughout the year in China has far outstripped domestic demand, previously supporting oil prices, but recent procurement by Beijing has noticeably slowed.
In terms of futures market structure, two weeks ago, the WTI crude oil futures contracts exhibited a positive spread, with near-term contract prices lower than those for the entire year of 2026, indicating that traders are starting to anticipate future oversupply. Last Wednesday’s U.S. crude oil inventory data confirmed this trend: for the week ending October 10, U.S. crude oil inventories increased by 3.5 million barrels, slightly lower than the prior week's increment of 3.7 million barrels but still at elevated levels. The latest predictions from the U.S. Energy Information Administration (EIA) show that the average price of WTI crude oil will drop to $52 per barrel by 2026, significantly below the generally accepted breakeven range of $60 to $62 per barrel for the oil industry. Analysts at Bank of America emphasized in their report, "For the past year, market participants have remained concerned about oil supply oversupply issues. Now, the long-term anticipated oversupply is finally starting to manifest in price levels."