The S&P 500 Index ($SPX) (SPY) on Friday closed down -2.71%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -1.90%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -3.49%. December E-mini S&P futures (ESZ25) fell -2.61%, and December E-mini Nasdaq futures (NQZ25) fell -3.39%.
Inventory indexes gave up an early advance on Friday and offered off sharply, with the S&P 500 and Nasdaq 100 sliding to 2-week lows and the Dow Jones Industrials dropping to a 1-month low.  Shares plummeted as US commerce tensions escalated with China after President Trump threatened a “large improve” of tariffs on Chinese language items, citing China’s latest “hostile” export controls on rare-earth minerals. Mr. Trump additionally mentioned there appears to be no motive to satisfy Chinese language President Xi Jinping on the APEC assembly in South Korea later this month.
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Shares initially moved larger on Friday, with the Nasdaq 100 posting a brand new all-time excessive. Decrease bond yields initially supported shares on Friday as a result of dovish feedback from Fed Governor Christopher Waller and St. Louis Fed President Alberto Musalem after they mentioned they supported extra Fed charge cuts. Nevertheless, the declines in T-note yields accelerated as shares slumped in response to President Trump’s tariff threats, with the 10-year T-note yield falling to a three-week low of 4.04%.Â
The College of Michigan US Oct client sentiment index fell -0.1 to a 5-month low of 55.0, stronger than expectations of 54.0.
The College of Michigan US Oct 1-year inflation expectations unexpectedly fell -0.1 to 4.6%, versus expectations of no change at 4.7%. The Oct 5-10 yr inflation expectations remained unchanged at 3.7%, proper on expectations.
Fed Governor Christopher Waller mentioned, “The labor market is weak,” and he is open to quarter-point rate of interest cuts on the coming FOMC conferences.
St. Louis Fed President Alberto Musalem mentioned that, “Wanting forward, I’m open-minded a few potential additional discount in rates of interest to supply additional insurance coverage in opposition to labor market weakening.”Â
Most inventory indexes rallied to file highs this week on optimism that development within the AI sector and spending on synthetic intelligence will translate into company income. Shares are additionally underpinned by hopes {that a} resilient US financial system and extra Fed easing will proceed to assist the financial system.
The shutdown of the US authorities is now into its second week, weighing on market sentiment and delaying key financial stories. The federal government shutdown means delays within the launch of presidency stories, together with the final two weeks of weekly preliminary unemployment claims, Tuesday’s Aug US commerce report, and final Friday’s month-to-month payroll report. The Bureau of Labor Statistics (BLS) on Friday mentioned that it’ll launch the September client value report on October 24 if the federal government shutdown continues into subsequent week. The Sep CPI report is scheduled for launch on October 15. The White Home has warned that if the federal government shutdown lingered, it will set off widespread dismissals of workers in authorities applications that do not align with President Trump’s priorities.  Bloomberg Economics estimates that 640,000 federal staff might be furloughed throughout the shutdown, which might broaden jobless claims and push the unemployment charge as much as 4.7%.
Rising company earnings expectations are a bullish backdrop for shares. In accordance with Bloomberg Intelligence, greater than 22% of corporations within the S&P 500 supplied steerage for his or her Q3 earnings outcomes which might be anticipated to beat analysts’ expectations, the very best in a yr. Nevertheless, Q3 income are anticipated to have risen by +7.2%, the smallest improve in two years. Additionally, Q3 gross sales development is projected to gradual to +5.9% from 6.4% in Q2.Â
The markets are pricing in a 97% probability of a -25 bp charge minimize on the subsequent FOMC assembly on Oct 28-29.Â
Abroad inventory markets on Friday settled decrease. The Euro Stoxx 50 closed down -1.68%.  China’s Shanghai Composite closed down -0.94%.  Japan’s Nikkei Inventory 225 closed down -1.01%.
Curiosity Charges
December 10-year T-notes (ZNZ5) on Friday closed up by +21 ticks. The ten-year T-note yield fell -8.3 bp to 4.055%. Dec T-notes rallied to a 3-week excessive Friday, and the 10-yer T-note yield fell to a 3-week low of 4.042%. T-notes rallied on dovish feedback as we speak from Fed Governor Christopher Waller and St. Louis Fed President Alberto Musalem, who mentioned they supported extra Fed charge cuts.  Sliding inflation expectations are additionally bullish for T-notes, following the 10-year breakeven inflation charge’s decline to a 2.25-month low of two.316% on Friday. Features in T-notes accelerated Friday after shares offered off on threats from President Trump of “large will increase” in tariffs on Chinese language items.Â
T-notes even have assist amid considerations concerning the ongoing US authorities shutdown, which may result in extra job losses, diminished client spending, and a weakened US financial system, doubtlessly permitting the Fed to proceed reducing rates of interest. Â
European authorities bond yields on Friday moved decrease.  The ten-year German bund yield fell to a 3-week low of two.633% and completed down -5.9 bp at 2.644%. The ten-year UK gilt yield fell to a 2-week low of 4.664% and completed down -7.1 bp to 4.675%.
ECB Governing Council member and Bundesbank President Nagel mentioned “the bar is moderately excessive” to change his evaluation that the present ECB financial coverage stance is suitable.
ECB Governing Council member Kazaks mentioned we’re about impartial on ECB charges as inflation stays contained and the present 2% charge is suitable.
Swaps are discounting a 2% probability for a -25 bp charge minimize by the ECB at its subsequent coverage assembly on October 30.
US Inventory Movers
Chipmakers fell sharply on Friday, dragging the general market decrease. ARM Holdings Plc (ARM) closed down greater than -9%, and Microchip Expertise (MCHP) and ON Semiconductor (ON) closed down greater than -8%. Additionally, Superior Micro Gadgets (AMD), NXP Semiconductors NV (NXPI), and Qualcomm (QCOM) closed down greater than -7% and Lam Analysis (LRCX), KLA Corp (KLAC), and GlobalFoundries (GFS) closed down greater than -6%. As well as, Analog Gadgets (ADI), Broadcom (AVGO), Micron Expertise (MU), and Marvell Expertise (MRVL) closed down greater than -5%. Lastly, ASML Holding NV (ASML) closed down greater than -4%.
The Magnificent Seven know-how shares sank on Friday, additional weighing on the broader market.  Tesla (TSLA) closed down greater than -5% and Amazon.com (AMZN) closed down greater than -4% to guide losers within the Dow Jones Industrials. Additionally, Nvidia (NVDA) closed down greater than -4%, and Apple (AAPL) and Meta Platforms (META) closed down greater than -3%. As well as, Microsoft (MSFT) closed down by greater than -2% and Alphabet (GOOGL) closed down by greater than -1%.
Power producers and power service suppliers retreated on Friday after the worth of WTI crude oil fell by greater than 4% to a five-month low. Consequently, APA Corp (APA) closed down by greater than -7% and Halliburton (HAL) closed down greater than -6%. Additionally, Baker Hughes (BKR), Devon Power (DVN), and Occidental Petroleum (OXY) closed down greater than -5%, and ConocoPhillips (COP) closed down greater than -4%. As well as, Marathon Petroleum (MPC), Phillips 66 (PSX), and Diamondback Power (FANG) closed down greater than -3%.Â
Enterprise World (VG) closed down greater than -24% because it doubtlessly faces multibillion-dollar damages over disputed liquefied pure gasoline shipments, after an surprising loss in a BP Plc arbitration that might pave the best way for extra claims.Â
Levi Strauss (LEVI) closed down greater than -12% after forecasting full-year adjusted EPS of $1.27-$1.32, the midpoint under the consensus of $1.31.
Mosaic (MOS) is down greater than -9% after reporting Q3 preliminary phosphate gross sales volumes of 1.70 million tons, weaker than the consensus of 1.83 million tons.Â
Doximity (DOCS) closed down greater than -9% after JPMorgan Chase downgraded the inventory to underweight from impartial with a value goal of $62.Â
Align Expertise (ALGN) closed down greater than -4% after Jeffries downgraded the inventory to carry from purchase.
Utilized Digital (APLD) closed up greater than +15% after saying it’s in superior discussions with a hyperscaler consumer for its second information middle in North Dakota.Â
Elastic NV (ESTC)Â closed up greater than +5% after saying a $500 million inventory buyback program and elevating its full-year 2026 gross sales outlook to $1.697 billion-$1.703 billion from a earlier estimate of $1.697 billion-$1.689 billion.Â
PepsiCo (PEP) closed up greater than +3% to guide gainers within the S&P 500 and Nasdaq 100, including to Thursday’s +4% advance, after reporting Q3 web income of $23.94 billion, higher than the consensus of $23.85 billion.Â
CVS Well being (CVS) closed up greater than +1% after the US authorities launched closing star rankings for 2026 for Medicare Benefit plans, and Evercore ISI mentioned the corporate’s closing numbers are doubtless “a reduction” for traders.
Amcor Plc (AMCR) closed up greater than +1% after forecasting full-year adjusted EPS of 80 cents to 83 cents, above the consensus of 80 cents.
Earnings Stories(10/13/2025)
Fastenal Co (FAST), Lionsgate Studios Corp (LION).
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