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US stocks were mixed with the SPX and NDX ultimately closing little changed after a choppy session, while the DJI was bid and RUT underperformed. Sectors were also varied amid a flurry of earnings, with Consumer Discretionary and Industrials the outperformers following strong earnings from General Motors (GM), boosting auto names, while Industrials benefitted from upside in 3M (MMM) and RTX (RTX), albeit Lockheed Martin (LMT) and Northrop Grumman (NOC) earnings disappointed. Conversely, Utilities, Communications, and Materials lagged, with the latter hit by tumbling precious metal prices as Gold suffered its largest absolute drop on record, which fell from near ATH levels earlier in the session at USD 4,375/oz, with a fall to a low of USD 4,087/oz with profit taking, easing credit concerns, and a more friendly tone towards China from Trump, all cited for the move. USD was firmer in a busy day of newsflow and with the buck seemingly supported by the ease of credit market concerns, which was reinforced by Zion Bancorp's earnings, as they noted a large quarterly loss stemmed from a few faulty loans rather than broad credit stress. There was no tier-1 data as the government remained on shutdown, although there was some optimism from Senate Majority Leader Thune, who is hopeful that the shutdown will end this week, while Senate Minority Leader Schumer and House Minority Leader Jeffries were said to have reached out to President Trump on Tuesday to sit down and negotiate. Looking ahead, highlights include Japanese Trade Data, Malaysian CPI, Supply from Australia, Holiday Closure in India. More Newsquawk in 2 steps: 1. Subscribe to the free premarket movers reports 2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days LOOKING AHEAD Highlights include Japanese Trade Data, Malaysian CPI, Supply from Australia, Holiday Closure in India. Click for the Newsquawk Week Ahead. US TRADE US stocks were mixed with the SPX and NDX ultimately closing little changed after a choppy session, while the DJI was bid and RUT underperformed. Sectors were also varied amid a flurry of earnings, with Consumer Discretionary and Industrials the outperformers following strong earnings from General Motors (GM), boosting auto names, while Industrials benefitted from upside in 3M (MMM) and RTX (RTX), albeit Lockheed Martin (LMT) and Northrop Grumman (NOC) earnings disappointed. Conversely, Utilities, Communications, and Materials lagged, with the latter hit by tumbling precious metal prices as Gold suffered its largest absolute drop on record, which fell from near ATH levels earlier in the session at USD 4,375/oz, with a fall to a low of USD 4,087/oz with profit taking, easing credit concerns, and a more friendly tone towards China from Trump, all cited for the move. SPX -0.01% at 6,735, NDX -0.06% at 25,127, DJI +0.47% at 46,925, RUT -0.52% at 2,487. Click here for a detailed summary. TARIFFS/TRADE US President Trump said he will discuss a lot of things with Chinese President Xi in two weeks and reiterated that they are going to do well in that negotiation. However, he also commented that maybe the meeting with Chinese President Xi won't happen. US soy industry groups noted that there are no new US soybean sales to China, and nothing is expected to be loaded in the coming weeks. US CBP processed nearly 24mln packages since the US ended the de minimis exemption, which would have received duty-free treatment. Many in Washington have been pushing for a pivot away from broad tariffs toward more surgical economic weapons such as chokepoints targeting sectors like software, according to WSJ's Lingling Wei. Furthermore, it was reported that a de-escalation on tariffs is a move toward what they believe is a smarter, more targeted economic war. US and Canada trade deal reportedly may be ready for approval at the APEC summit, according to Globe and Mail which noted the US is not prepared to make a deal on auto or softwood lumber, although a deal on steel, aluminium and energy could be ready to sign later this month. However, Canadian Trade Minister LeBlanc later said he's surprised by reports that Canada and the US are nearing a trade deal and emphasised that it is overoptimistic to expect a trade deal in a few days. EU Trade Commissioner Sefcovic said he held a video call with his Chinese counterpart and invited the Chinese authorities to Brussels in the coming days, which they accepted. Sefcovic said the scale of China's export control, scaled up since April, is unjustified and harmful, while they agreed to intensify contacts at all levels and he added that a prompt resolution of rare earth restrictions is essential. China’s Commerce Minister said following a video call with the EU Trade Chief that China firmly opposes generalisation of the national security concept regarding Nexperia and urged the Netherlands to offer solutions. Furthermore, they also discussed export controls and the EU anti-subsidy case against Chinese EVs, while China added that it is committed to safeguarding global supply chain stability. It was separately reported that China and the EU are set to hold export control talks in Brussels. Germany and France are supporting a push to discuss China’s increasingly restrictive trade measures at an EU leaders’ summit in Brussels on Thursday, according to Bloomberg citing sources. China convened an unusually large meeting with foreign businesses in an effort to reassure them its new export controls aren’t meant to restrict normal trade, as policymakers seek to calm a backlash over the decision, according to Bloomberg. China reportedly eyes a 3-way currency swap with Japan and South Korea amid Trump’s tariff war, as Beijing seeks to strengthen regional financial ties and boost yuan use as US trade pressures weigh on East Asian economies, according to SCMP citing a source. NOTABLE HEADLINES US Senate Majority Leader Thune is hopeful this will be the week the shutdown ends and is planning another vote on the stopgap bill on Wednesday. US Senate Minority Leader Schumer said he and House Minority Leader Jeffries reached out to President Trump on Tuesday to sit down and negotiate. FX USD was firmer in a busy day of newsflow and with the buck seemingly supported by the ease of credit market concerns, which was reinforced by Zion Bancorp's earnings, as they noted a large quarterly loss stemmed from a few faulty loans rather than broad credit stress. There was no tier-1 data as the government remained on shutdown, although there was some optimism from Senate Majority Leader Thune, who is hopeful that the shutdown will end this week, while Senate Minority Leader Schumer and House Minority Leader Jeffries were said to have reached out to President Trump on Tuesday to sit down and negotiate. EUR gave up ground to the stronger greenback with the single currency retreating to just beneath the 1.1600 handle. GBP was mildly pressured owing to the firmer dollar, while it was also reported that UK Chancellor Reeves has vowed to smooth the path to further BoE interest rate cuts with Budget measures aimed at curbing inflation and easing the cost of living which is said to give space for further cuts in the coming months. JPY underperformed after Takaichi was confirmed as the new Japanese PM, but did see some brief support as the new PM said she does not see the need to review the BoJ-Government accord now and that the method of implementing monetary policy lies with the BoJ. Canadian CPI Inflation MM (Sep) 0.1% vs Exp. 0.0% (Prev. -0.1%) Canadian CPI Inflation YY (Sep) 2.4% vs. Exp. 2.3% (Prev. 1.9%) FIXED INCOME T-notes gained with upside led by the long-end, while gold saw the largest percentage decline since 2013. COMMODITIES Oil prices were ultimately firmer in a choppy day of trade, amid a deluge of headline risk, with support seen after Russia's Foreign Minister Lavrov noted Russia hasn't changed its position since Anchorage and that a halt at the current frontline means to forget war causes. US is to buy 1mln bbls for the SPR with oil for delivery in December 2025 and January 2026. US Private Inventory Data (bbls): Crude -3.0mln (exp. +1.2mln), Distillate -1.0mln (exp. -1.9mln), Gasoline -0.2mln (exp. -0.8mln). GEOPOLITICAL MIDDLE EAST - US President Trump posted that numerous allies would welcome the opportunity of going into Gaza to "straighten" Hamas, while he told these countries and Israel “NOT YET!” and that "There is still hope that Hamas will do what is right. If they do not, an end to Hamas will be FAST, FURIOUS, & BRUTAL!" US VP Vance noted Israel will have to agree on what troops will be on the ground in Israel under US President Trump's Gaza plan, while he added that Hamas will be obliterated if it does not cooperate and unless Hamas disarms, very bad things are going to happen. US Secretary of State Rubio plans to travel to Israel later this week or over the weekend, according to Axios citing US and Israeli officials. RUSSIA-UKRAINE Ukrainian President Zelensky said Russia is doing everything to reject a diplomatic way to end the war and the postponement of the US decision on Tomahawks made Russia less interested in diplomacy. US Secretary of State Rubio and Russian Foreign Minister Lavrov had a productive call, while there are no plans for a Trump-Putin meeting in the immediate future, according to a senior White House official. It was also reported that a senior White House official told NBC the planning towards a Trump/Putin summit in Budapest is "on hold" at the moment and that Trump believes both sides aren't ready enough to talk to justify moving forward right now. Russian Foreign Minister Lavrov agreed with US Secretary of State Rubio to continue with phone contact and stated that Russia hasn't changed its position since Anchorage, while he added that a halt at the current frontline means to forget war causes. Russia's Kremlin said neither US President Trump nor Russian President Putin named an exact date on the Putin-Trump summit timing, while it added that they cannot postpone what wasn't scheduled. Europe and Ukraine are said to ready a 12-point plan to end Russia’s war, according to Bloomberg. ASIA-PAC NOTABLE HEADLINES Japanese PM Takaichi said she is determined to defend Japan's national interest via diplomacy and security, while she instructed the cabinet to compile a package of steps to cushion the blow from the rising cost of living. Furthermore, she plans to call on opposition parties for cooperation for stable politics and will do the utmost to cushion the blow from US tariffs on Japan's economy. Japanese PM Takaichi said they do not see the need to review the BoJ-Government accord now and that the method of implementing monetary policy lies with the BoJ, while she added the BoJ and government must work closely. Takaichi said the BoJ's 2% inflation target should be met, not just through cost-push factors but price rises accompanied by wage gains. Furthermore, she hopes the BoJ conducts appropriate monetary policy to stably and sustainably achieve its inflation target and wants to deepen the relationship of trust with US President Trump. Furthermore, it was reported that Takaichi wants to have a summit meeting with South Korean President Lee Jae Myung, while she is to meet with US President Trump on October 28th next week and will discuss national defence. EU/UK BoE Governor Bailey said it is an open question whether the First Brands crisis was idiosyncratic or systemic and they have to be very careful on private finance purchasing life insurers, while they are beginning to see the slicing and dicing of loan structures going on. UK Chancellor Reeves has vowed to smooth the path to further BoE interest rate cuts with Budget measures aimed at curbing inflation and easing the cost of living, according to FT. Reeves said she was determined to get a grip on borrowing and would take steps in her Budget to cut household bills, creating space for further BoE rate cuts in the coming months. French President Macron said the voted-upon pension reform was needed for the country and they need a moment of stability regarding the pension reform debate, while he reiterated that a referendum on pension reform remains a possibility. Many EU leaders, including German Chancellor Merz, French President Macron and Italian PM Meloni, called for the EU to review, reduce and restrain legislation to reduce the burden on business, according to Reuters citing a letter. Furthermore, the leaders called for the modernisation of EU competition law and acceleration of merger control and state aid procedures at the EU level. ECB's Lane said monetary policy transmission is progressing smoothly and it makes sense to maintain a meeting-by-meeting and data-dependent approach to assessing the strength of monetary transmission at any given point in time. Loading...
