US-China Tensions Ramp Up, Mixed Earnings Weigh on Wall Street – Market wrap for the North American session - October 22

Ben Graham · Outubro 22

Log in to today's North American session Market wrap for October 22

US stocks fell on Wednesday due to a combination of mixed corporate earnings (like Netflix) and renewed fears over US-China trade relations.

A report suggested the Trump administration is planning new restrictions on exports to China covering everything from laptops to jet engines in response to China's limits on rare earth minerals, leading to an immediate drop in the stock market, especially for tech companies.

This trade tension overshadowed President Trump's mixed signals about an upcoming meeting with Chinese President Xi Jinping.

While some analysts believe the market decline is temporary and the overall earnings season has been good, they warn that the trade dispute will likely continue until the two leaders meet, and investors should not panic and change their long-term strategies based on one day of losses.

The market drop was most painful for assets that are popular with individual, trend-following investors, specifically including precious metals, cryptocurrencies, and AI startups.

The broader S&P 500 index ended the day just under 6,700, with major stocks like Netflix (-10%) and Texas Instruments (-5.6%) seeing steep declines. The day's trading also featured extreme volatility for companies like Beyond Meat, reminiscent of the intense swings seen in "meme stocks," the Russell 2000, fell by 1.5%.

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Cross-Assets Daily Performance

DXY_2025-10-22_21-54-19 — Cross-Asset Daily Performance, October 22, 2025 – Source: TradingView

Silver and Gold recovered late in the day and this was largely down to renewed concerns around a protracted US-China trade war.

The Dollar Index failed to continue its advance finishing the day slightly lower with the Nasdaq and Dow Jones finishing the day around 0.70% and 0.80% down respectively.

Oil prices rose by more than $2 a barrel after US Treasury Secretary Scott Bessent said more U.S. sanctions targeting Russia would be announced.

A picture of today's performance for major currencies

2025-10-22 22_12_11-Greenshot — Currency Performance, October 22 – Source: OANDA Labs

The British pound was the weakest major currency on Wednesday after inflation unexpectedly stayed at 3.8%, which was lower than both economists and the Bank of England had predicted, causing Sterling to fall against the dollar.

Meanwhile, the Japanese yen hit a one-week low as reports surfaced that the new Prime Minister, Sanae Takaichi, is preparing a large economic stimulus package to help households deal with inflation.

The US dollar index edged slightly lower after three days of gains, and the euro rose slightly after a planned summit between President Trump and Russian President Vladimir Putin was postponed due to Russia's rejection of an immediate ceasefire in Ukraine.

A look at Economic data releasing through tonight and tomorrow's session

2025-10-22 22_03_26-Greenshot — For all market-moving economic releases and events, see the MarketPulse Economic Calendar.

The Asian session will be a quiet one in terms of data releases.

The European session will be quiet as well with the highlight coming from Consumer Confidence data being released.

The US session will also see a lack of notable data releases meaning tomorrow may see geopolitical developments dominate the agenda. Any comments on the US-China trade war as well as the promise by US officials regarding new sanctions on Russia may be the main catalyst for market moves tomorrow.

Safe Trades!

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