Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
U.S. stock market futures experienced a sharp decline today, with the Dow Jones Industrial Average, S&P 500, and Nasdaq all falling, as optimism from earlier in the week faded. The downturn followed a highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping in Busan, which concluded without a major breakthrough on trade. Adding to market pressures, Meta Platforms’ stock plunged in premarket trading, while investors awaited crucial earnings reports from Apple and Amazon.
Trade Talks Yield Limited Progress
The 90-minute summit between President Trump and President Xi produced only modest results. The United States agreed to halve Fentanyl-related tariffs from 20% to 10%, while China pledged to maintain rare earth exports and cooperate on curbing the Fentanyl crisis.
President Trump later indicated on Truth Social that China committed to restarting soybean purchases and initiating large-scale energy imports, including potential deals for oil and gas from Alaska. The Chinese government confirmed a one-year suspension of a 24% reciprocal tariff and a pause on rare-earth export restrictions, alongside discussions on TikTok and technology licensing. However, markets largely viewed these outcomes as symbolic rather than a significant breakthrough.
Market Movers and Corporate Earnings
Following the news, Dow Jones futures dropped 200 points after an earlier gain, the S&P 500 slipped 16 points, and Nasdaq futures fell 60 points. Traders engaged in selling activity, reacting to the cautious headlines and mixed corporate earnings.
Meta Platforms saw its stock plummet 8% in premarket trading, despite reporting stronger-than-expected third-quarter revenue of $51.24 billion against an estimated $49.4 billion, and earnings per share of $7.25 compared to a forecast of $6.69. Analysts pointed to weak engagement data and higher capital expenditure guidance as concerns. Conversely, Alphabet shares jumped after the company reported its first quarter with over $100 billion in revenue. Attention now shifts to Apple and Amazon, both scheduled to release earnings later today, which could influence the market’s immediate direction.
Broader Market and Economic Factors
Bitcoin’s value fell over 3% to below $108,000, extending losses after Federal Reserve Chair Jerome Powell cautioned against expectations of further rate cuts this year. This hawkish stance by Powell, despite the Fed’s second consecutive 0.25% rate reduction to a benchmark range of 3.75–4.0%, dampened sentiment across cryptocurrency and equity markets.
In contrast, gold prices rebounded 1.3% to approximately $3,982 per ounce, recovering from a four-day decline as investors sought safe-haven assets amid ongoing uncertainties. Meanwhile, Standard Chartered Plc reported robust third-quarter results, with pretax profit rising to $1.99 billion, surpassing analyst estimates. CEO Bill Winters stated the bank is on track to achieve a 13% return on tangible equity by 2025, one year ahead of its original projection.
Analyst Outlook
Market experts suggest that while the Trump-Xi meeting signaled a diplomatic thaw, it lacked substantial commitments. Charu Chanana, a strategist at Saxo Capital Markets, noted that markets are currently pricing in caution rather than optimism. Unresolved issues, such as technology export controls and delayed discussions on port fees for Chinese ships, continue to keep risk sentiment fragile, with volatility expected to persist ahead of key earnings reports.
