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US stocks saw further pressure on Thursday with the hawkish Powell still weighing, while shares of Meta (META) and Microsoft (MSFT) were hit following earnings the previous night, but Google (GOOGL) saw upside. On the trade front, the overall tone of the Trump/Xi meeting was positive, with the two sides agreeing to a one-year trade truce while the US will halve the fentanyl-related tariffs on China and delay tech export controls for a year. In return, China will pause the latest rare-earth export curbs for a year and purchase US soybeans. The majority of sectors were red, with Consumer Discretionary, Communications and Tech all underperforming, while Real Estate, Financials and Healthcare outperformed in the green. USD strengthened broadly against peers as markets continued to reprice a conflicted Fed on a December policy decision. The outcome of the Trump-Xi meeting was also encouraging for USD, with the US to lower its reciprocal and fentanyl tariffs on China, while China will delay its rare earth export controls for one year. Looking ahead, highlights include South Korean Industrial Production & Retail Sales, Japanese Tokyo CPI, Industrial Production & Retail Sales, Australian Private Sector Credit & PPI, Chinese Official PMIs, Supply from Australia & Japan. 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 South Korean Industrial Production & Retail Sales, Japanese Tokyo CPI, Industrial Production & Retail Sales, Australian Private Sector Credit & PPI, Chinese Official PMIs, Supply from Australia & Japan. Click for the Newsquawk Week Ahead. US TRADE US stocks saw further pressure on Thursday with the hawkish Powell still weighing, while shares of Meta (META) and Microsoft (MSFT) were hit following earnings the previous night, but Google (GOOGL) saw upside. On the trade front, the overall tone of the Trump/Xi meeting was positive, with the two sides agreeing to a one-year trade truce while the US will halve the fentanyl-related tariffs on China and delay tech export controls for a year. In return, China will pause the latest rare-earth export curbs for a year and purchase US soybeans. The majority of sectors were red, with Consumer Discretionary, Communications and Tech all underperforming, while Real Estate, Financials and Healthcare outperformed in the green. SPX -0.99% at 6,822, NDX -1.47% at 25,735, DJI -0.23% at 47,522, RUT -0.76% at 2,466. Click here for a detailed summary. TARIFFS/TRADE US President Trump posted on Truth that he is more confident than ever that the friendship between the US and Japan is strong, which he said is thriving, prosperous, and will soon be greater than ever before. US Treasury Secretary Bessent said US President Trump and Chinese President Xi were able to discuss big picture issues, while the mood in the room was one of great respect, and Trump agreed with Xi to work to end the fentanyl crisis. Bessent said the US agreed to cut fentanyl tariffs on Chinese goods in half in return for reducing fentanyl precursor chemical flows to the US, and the US is suspending the new rule on entity list restrictions for US tech for a year. Furthermore, the suspension of the commerce entity list rule was agreed in return for a suspension of the rare earth licensing regime, while Section 301 measures targeting China's maritime logistics and shipbuilding were also suspended for one year. US official said the Trump administration agreed to delay the rule expanding the number of Chinese companies on the Commerce Department's entity list for a year. Canadian PM Carney is to meet with Chinese President Xi on Friday in South Korea. NOTABLE HEADLINES US Treasury Secretary Bessent said he hopes to have the new Chair candidate by Christmas, and he will be conducting a second round of Fed Chair interviews, while he applauds the Fed rate cut, but stated that language shows they are stuck in the past and models are broken. Bessent also said he is very optimistic for 2026 growth and inflation levels, as well as stated that jobs growth will rebound very strongly and thinks the US is going to have parallel prosperity next year on Main Street and Wall Street. US Transportation Secretary Duffy said air traffic will be snarled if the government shutdown continues, and they are working with unions to prevent shutdown-related disruptions. Fox was told not to expect another test vote on Thursday to break a filibuster on the GOP spending bill and that the Senate was likely to leave town that afternoon for the weekend, according to Fox News. Amazon.com Inc (AMZN) Q3 2025 (USD): EPS 1.95 (exp. 1.57), Revenue 180.2bln (exp. 178.08bln). Apple Inc (AAPL) Q4 2025 (USD): EPS 1.85 (exp. 1.78), Revenue 102.5bln (exp. 102.14bln), iPhone revenue 39.03bln (exp. 50.2bln), iPad revenue 6.95bln (exp. 6.98bln), Mac revenue 8.73bln (exp. 8.59bln), Services 28.75bln (exp. 28.17bln), Wearables 9.01bln (exp. 8.5bln), China revenue 14.49bln (exp. 16.24bln). FX USD strengthened broadly against peers as markets continued to reprice a conflicted Fed on a December policy decision. The outcome of the Trump-Xi meeting was also encouraging for USD, with the US to lower its reciprocal and fentanyl tariffs on China, while China will delay its rare earth export controls for one year. EUR gave way to the firmer buck and retreated beneath the 1.1600 handle. The ECB's decision to hold rates at 2.00% was a non-event and the statement offered little as policymakers' views on the inflation outlook were broadly unchanged, while Lagarde reiterated that the ECB is in a "good place" for monetary policy. GBP weakened for a third consecutive day with headwinds seen amid concerns over UK Chancellor Reeves' future after a PM spokesperson said they received new information on Reeves' house rental error, although PM Starmer had previously ruled out an investigation and still has full confidence in Chancellor Reeves. JPY was the G10 laggard after the BoJ meeting, where it held rates as expected at 0.5% and refrained from explicitly guiding towards another hike in 2025. SNB's Tschudin said they are in a situation where they have an appropriate monetary policy at present and that policy is expansive, while she added it is ok if inflation went below 0% for a short time. FIXED INCOME T-notesremained subdued in the aftermath of the Fed, while the Meta bond sale also weighed. COMMODITIES Oil prices settled flat, in what was a choppy day of price action but within contained ranges. US Energy Secretary Wright said the US could step in if China buys less energy from Russia. GEOPOLITICAL MIDDLE EAST Hezbollah called for support from the Lebanese army in confronting Israel, according to a statement. ASIA-PAC NOTABLE HEADLINES Japanese Finance Minister Katayama said the BoJ decision was extremely reasonable, while she will not reaffirm the past remark that USD/JPY should be at 120.00. EU/UK NOTABLE HEADLINES UK PM Starmer spokesperson said they have received new information on Chancellor Reeves' house rental error, which has been passed to the PM and his adviser, while the PM has full confidence in Chancellor Reeves. ECB kept rates unchanged with the Refinancing Rate at 2.15%, Deposit Rate at 2.0% and Marginal Lending Facility at 2.40%, as expected. ECB Statement noted that inflation remains close to 2% and the assessment of the inflation outlook is broadly unchanged, while the ECB is not pre-committing to a particular rate path and will follow a data-dependent and meeting-by-meeting approach to determine appropriate monetary policy stance. ECB President Lagarde said the outlook remains uncertain, given trade disputes and geopolitics, while the global environment is to remain a drag. Lagarde reiterated that the ECB is in a "good place" for monetary policy, but added that this is not a fixed point, and they will do whatever is necessary to stay in a good place. Furthermore, Lagarde said there was unanimity on the October decision. ECB policymakers reportedly prepare for a December showdown on inflation and rates, as some think 2028 inflation projection would warrant rate cut debate, others favour giving little weight to any small undershooting three years ahead, via Reuters sources DATA RECAP EU GDP Flash Prelim QQ (Q3) 0.2% vs. Exp. 0.1% (Prev. 0.1%) EU GDP Flash Prelim YY (Q3) 1.3% vs. Exp. 1.2% (Prev. 1.5%) EU Economic Sentiment (Oct) 96.8 vs. Exp. 96.0 (Prev. 95.5, Rev. 95.6) EU Consumer Confidence Final (Oct) -14.2 vs. Exp. -14.2 (Prev. -14.2) EU Industrial Sentiment (Oct) -8.2 vs. Exp. -10.0 (Prev. -10.3, Rev. -10.1) EU Services Sentiment (Oct) 4.0 vs. Exp. 3.8 (Prev. 3.6, Rev. 3.7) EU Unemployment Rate (Sep) 6.3% vs. Exp. 6.3% (Prev. 6.3%) German GDP Flash QQ SA (Q3) 0.0% vs. Exp. 0.0% (Prev. -0.3%) German GDP Flash YY NSA (Q3) 0.3% vs. Exp. 0.2% (Prev. -0.2%) German CPI Prelim MM (Oct) 0.3% vs. Exp. 0.2% (Prev. 0.2%) German CPI Prelim YY (Oct) 2.3% vs. Exp. 2.2% (Prev. 2.4%) German Unemployment Change SA (Oct) -1.0k vs. Exp. 8.0k (Prev. 14.0) Loading...
