Closing Recap (Week Ending October 10)

U.S. stocks suffered their biggest weekly losses since spring, plunging on Friday after President Trump reignited the trade war with China, canceling a planned meeting with President Xi and threatening massive new tariffs. In currency markets, the US Dollar saw a volatile week, with EUR/USD rebounding Friday on the dollar selloff but still down for the week, GBP/USD tumbling to a two-month low on domestic fiscal worries, and USD/JPY ending higher for the week despite a late yen rally. The risk-off move crushed crypto markets, sent gold soaring, and pushed oil and Treasury yields sharply lower. 

Key Takeaways 

• Trade War Eruption Slams Stocks: Stocks plunged Friday after President Trump canceled a meeting with President Xi and threatened a massive increase in tariffs on China, followed by a post-close threat of 100% tariffs effective Nov 1. 
• Major Weekly Losses: A sudden escalation in U.S.-China trade tensions on Friday triggered a massive market sell-off, with the S&P 500 (-2.43%), Nasdaq (-2.53%), and Dow (-2.73%) posted their biggest weekly percentage losses since May and April, respectively, with $1.6 trillion wiped out on Friday alone. 
• Currency Pairs React to Trade Shock: The US Dollar’s 4-day rally halted Friday; EUR/USD bounced above 1.1600 but ended the week down -1.03%, GBP/USD sank to a 2-month low, and USD/JPY reversed some of its 2.05% weekly gain as the yen caught a safe-haven bid. 
• “Bloodbath” in Crypto Markets: The risk-off wave caused the largest single-day liquidation event in crypto history. Bitcoin plunged from $126k to $102k in a “needle-like wick,” triggering a record-breaking $9.4 billion in liquidations in 24 hours as extreme leverage was wiped out. 
• Gold Surges, Oil Tumbles: Investors rushed for haven assets. Gold jumped to $4,000/oz for its 8th straight weekly gain on extreme haven demand. WTI crude oil tumbled below $60 for the first time since May on demand fears. 
• Yields Plunge on Safe-Haven Rush: Treasury yields fell sharply for the day and week, with the 10-year yield dropping over 9bps Friday as investors rushed into bonds. 
• Shutdown & Data Delays: The US government shutdown enters its 10th day, delaying key economic data like CPI and PPI. 
• Week Ahead Focus – Key Risk Events: Q3 earnings season kicks off with major banks (JPM, GS, C). Other key events include the RBA Minutes (Tue) and Chinese trade/inflation data (Mon/Wed). 

Looking Ahead

After a brutal week that saw the abrupt return of trade war fears and a historic liquidation event in crypto, markets will be on edge. The open on Sunday will be critical as traders have more time to digest the post-close threat of 100% tariffs on China. Looking ahead, the market enters a holiday-shortened week with a sparse economic calendar, putting the focus squarely on the start of Q3 earnings season and the fallout from the trade war escalation. With the US government shutdown now in its second week, key data releases like CPI and PPI have been delayed, leaving investors with little domestic economic data to trade on. The main event will be the kick-off of Q3 earnings reports, with major banks including JPMorgan, Goldman Sachs, and Citigroup reporting on Tuesday. Their results and, more importantly, their outlooks on the economy in the face of higher tariffs will be critical. 

Internationally, Chinese trade balance (Monday) and inflation data (Wednesday) will be closely watched for signs of economic strain. The minutes from the Reserve Bank of Australia’s (RBA) last meeting (Tuesday) will also be on the docket. However, the primary driver of sentiment will undoubtedly be any further rhetoric or action on the US-China trade front. The immediate focus is how markets will react to President Trump’s after-hours threat of 100% tariffs. The open on Sunday evening will be critical. Any further social media posts or official statements on U.S.-China relations will be the single most important driver of market direction.

Market Overview

What began as a rebound for U.S. stocks quickly devolved into a sharp sell-off on Friday, capping a brutal week for markets as the US-China trade war erupted with renewed ferocity. Sentiment turned on a dime mid-day after President Trump, via social media, announced there was “no reason” to meet with Chinese President Xi Jinping as planned and that the U.S. was calculating a massive increase in tariffs on Chinese goods. This was in response to China’s stated plans to impose export controls on rare earth minerals. The news, the first major trade escalation in months, provided the perfect catalyst for investors to take profits from a market that had gone 119 days without a 3% pullback. The selling intensified after the market close when Trump threatened a 100% retaliatory tariff on China, effective November 1st. The CBOE Volatility Index (VIX) surged 33% as fear returned to the market. 

Index	Last Closing Level	Friday’s Change	Friday’s Change (%)	Weekly Change (%)
DJ Industrials	45479	-878.82	-0.019	-0.0273
S&P 500	6552	-182.61	-0.0271	-0.0243
Nasdaq	22204	-820.2	-0.0356	-0.0253
Russell 2000	2394	-74.25	-0.0301	-0.0247

The risk-off move was even more violent in the cryptocurrency space, which was described as a “bloodbath.” Bitcoin plunged from a high of $126,000 to as low as $102,000 in a violent liquidation spike, wiping out over $250 billion from the total crypto market cap. The sell-off triggered a historic $9.4 billion in liquidations across the crypto market in just 24 hours, evidence of the extreme leverage that had built up in the system. The sudden flight from risk also hammered crude oil on demand fears but sent investors rushing into the safety of gold and U.S. Treasuries.

Economic Data Calendar (Week of October 13th)

The market enters the week reeling from the trade shock and flying blind due to the ongoing U.S. government shutdown, which is delaying key economic data. The focus will pivot dramatically from macro data to corporate fundamentals with the start of Q3 earnings season, while any new trade headlines will be the dominant driver of overall sentiment.

MON (Oct 14): 

• US Columbus Day Holiday: US Bond Market Closed, Canadian and Japanese markets are closed, Stock Market Open. 
• Chinese Trade Balance (Sep): Exports exp. +7.6% Y/Y, Imports +2.3% Y/Y. 
• OPEC Monthly Oil Market Report (MOMR): Supply/demand outlook. 

TUE (Oct 15): 

• US Earnings Season Begins: JPM, GS, WFC, C report. 
• RBA Meeting Minutes (Sep 30 Meeting): Details on the RBA’s less dovish turn. 
• UK Unemployment/Wages (Aug): Unemployment rate exp. steady at 4.7%.
•  German ZEW Economic Sentiment (Oct): Investor confidence for Germany. 
• IEA Oil Market Report (OMR): Global oil market assessment. 

WED (Oct 16): 

• Chinese CPI & PPI (Sep): CPI exp. -0.1% Y/Y, PPI exp. -2.3% Y/Y. Watched for persistent deflationary pressures. 
• EZ Industrial Production (Aug): Eurozone factory data. 
• US NFIB Small Business Index (Sep): US business sentiment.

THU (Oct 17): 

• Australian Employment Report (Sep): Employment exp. +15k, Unemployment exp. to tick up to 4.3%. 
• UK GDP (Aug – Monthly): Expected to show a 0.2% M/M uptick. 
• US Philly Fed Manufacturing Index (Oct): Regional activity survey.

FRI (Oct 18): 

• EZ HICP Final (Sep): Final Eurozone inflation reading. 
• US Building Permits/Housing Starts (Sep): Housing market data. 

Commodities, Currencies, and Treasuries 

Gold prices surged on Friday, gaining 0.79% to settle at a remarkable $4,000.40/oz, marking its eighth consecutive week of gains. The precious metal benefited from extreme safe-haven demand amid the trade war escalation. In contrast, crude oil prices tumbled, with WTI falling 4.24% on Friday to settle at $58.90/bbl, its first close below $60 since May, on fears that higher tariffs will crush global demand. 

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	58.9	-2.61	USD/bbl
Brent Crude	62.73	-2.49	USD/bbl
Gold (Dec Fut.)	4004.4	31.8	USD/oz
EUR/USD	1.1604	0.0041	Rate
USD/JPY	151.89	-1.19	Rate
10-Year Note Yield	0.04053	-0.00092	Yield (%)
Bitcoin	$112,980	-$8,734	USD

In the currency markets, the US Dollar’s four-day rally came to an abrupt halt. The dollar index (DXY) slid 0.5% Friday, which had been rallying all week, but still ended the week with gains of nearly 1.5%:

• The EUR/USD pair snapped a four-day losing streak to rebound above 1.1600 but still finished the week down -1.03%. 
• The GBP/USD pair had its worst week since January, tumbling to a two-month low as UK fiscal worries compounded dollar strength. 
• The USD/JPY pair saw a volatile week, with the dollar gaining 2.05% for the week but giving back a large portion on Friday as the yen caught a late safe-haven bid. The most dramatic reversal was in the USD/JPY; the pair had rallied all week as Sanae Takaichi’s victory in Japan’s LDP election signaled a yen-negative policy mix, but Friday’s risk-off move sent investors pouring into the Yen as a safe haven, erasing a significant portion of the week’s gains.
• U.S. Treasury yields plunged, with the 10-year yield falling over 9bps on Friday as investors rushed into the safety of government bonds.

The digital asset space witnessed a historic “bloodbath.” The trade-war news triggered a panic-driven, cascading liquidation event that was larger than the collapses of LUNA, FTX, or the COVID crash. Bitcoin plunged in a “needle-like wick” from nearly $126,000 to below $102,000 as over $1.1 billion in leveraged long positions were force-liquidated within hours. Ethereum suffered an even steeper 15% drop. The crash was a clear sign that extreme leverage had built up in the system, and the macro shock provided the catalyst for a violent deleveraging.