Trade Tensions Crush Commodities; Earnings Season Starts

SIA Wealth webinar cover image from February 2025

The markets have been on a roller-coaster ride over the past several days as Trump’s tweets and trade talk roil sentiment. Friday’s selloff was sparked by President Trump threatening China over rare earths and announcing a new 100% tariff on Chinese goods to take effect November 1st. Over the weekend, he appeared to back off, saying things with China “will be fine”, which sparked yesterday’s rebound that saw the S&P 500 rally 1.5% and the NASDAQ gain 2.2%.

Overnight, China ratcheted up trade tensions again, launching sanctions against several US divisions of Hanwha Ocean, a South Korean shipbuilding company. US index futures are down 0.7% to 1.1%, with NASDAQ futures leading the way back downward. In Europe this morning, the DAX is down 1.2% and the FTSE is down 0.4%. Asia-Pacific trading saw the Nikkei plunge 2.6% and the Hang Seng drop 1.7%.

Commodities are getting hammered on concern that trade troubles could slow the global economy and reduce resource demand. Crude Oil is down 2.4%, while Copper has fallen 3.5%. Gold is up another 0.2%, trading near $4,150/oz, indicating capital continues to move toward defensive havens.

Earnings season officially gets underway in the US today. JPMorgan Chase ($5.07 vs Street $4.84), Wells Fargo ($1.66 vs Street $1.55, up 3.0% premarket), Goldman Sachs* ($12.25 vs Street $11.00), Blackrock ($11.55 vs Street $11.30). Johnson & Johnson ($2.80 vs Street $2.76) have all exceeded expectations, with Goldman Sachs* and Citigroup also due today. Headliners for the rest of this week include Bank of America and Morgan Stanley on Wednesday, and American Express on Friday.

With the US government still shut down, the economic calendar is dominated by speeches from central bank officials, including Fed Chair Powell today and Bank of Canada Governor Macklem on Thursday.

*Shares of Goldman Sachs are held in some portfolios managed by SIA Wealth Management.

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