2025-10-13 09:16
publication
2025-10-13 09:16
On Friday, US President Donald Trump went on the warpath with communist China. And on Sunday he declared that “everything will be fine with China.” In the meantime, however, financial markets managed to react quite panicky.
It all started after the opening of Friday's session on Wall Street. – Very strange things are happening in China! “They are becoming very hostile and sending letters to countries around the world saying they want to impose export controls on every element of production related to rare earth metals and virtually everything else they can think of, even if it is not produced in China,” Trump wrote on Truth Social.
This was the US president's response to Beijing's controls on the export of rare earth metals, announced a day earlier. In this way, the PRC authorities threatened to suspend deliveries of these critical components to the West, in turn retaliating against American restrictions on semiconductors. Financial market participants saw President Trump's harsh words as a resumption of the already dormant trade conflict between Beijing and Washington.
Friday's cash session in New York brought sharp declines in stock indices. The Nasdaq and S&P500 recorded their steepest daily declines since April, with the former losing more than 3.5%. In post-mortem trading, the sell-off intensified as President Trump threatened to impose additional 100% tariffs on China from November 1.
“Don't worry about China. Everything will be fine.”
However, several dozen hours later it turned out (as usual) that President Trump's harsh statements were just a bluff and a negotiating ploy. – I think everything will be fine with China. Don't worry about China, everything will be fine! – wrote the US president in a Sunday entry on the Truth Social website.
– The highly respected President Xi just had a bad moment. He doesn't want a crisis for his country, and neither do I. The US wants to help China, not hurt it!!! – Trump wrote. -He's a very tough man, a very smart man. He is a great leader for his country. He's a great leader and I have a great relationship with him, Donald Trump told reporters during a conversation aboard Air Force One en route to Israel.
As a result, Monday's trading began with making up for Friday's losses. By 9:00 a.m., S&P500 futures were up 1.4%, while Nasdaq futures were up nearly 1.9%. Gold prices increased very strongly – i.e. by over 2%, and in dollar terms they reached a new all-time record of USD 4,096/oz.
– I am convinced that there will be more bark than bite here – Daniel Ives, an analyst at Wedbush, commented somewhat maliciously on the recent confusion. According to Ives, Trump and Xi will finally meet and reach an agreement, avoiding the introduction of prohibitive new tariffs.
However, the market was given an excuse to suddenly increase volatility. Volatility, which has practically died down in recent days and weeks. Thanks to this, the fourth quarter on financial markets may turn out to be much more interesting than the third.
K.K
