TheDrop Market Analysis, 10/14/25

Stocks receded from all-time highs as investors react to ongoing U.S.-China trade war developments and Jerome Powell's address today.

U.S. President Donald Trump (left) and Chinese President Xi Jinping (right).

The Nasdaq Composite led losses today with its 0.8% reduction in point value, while the S&P 500 index closed 0.2% lower and the Dow Jones Industrial Average fell 0.4%. The VIX surged 9.35%, reflecting on the quite volatile nature experienced by stocks as investors were quick to sell off their capital from markets due to breaking news.

European ETFs likewise fell significantly as the ongoing cross-Pacific trade conflict is having a real impact on Europe with supply disruptions and other economic effects. While the British FTSE 100 managed to eke out gains, the French CAC 40 fell 0.18% and the German DAX P fell 0.62%. Asian stocks had quite the inverse relationship, as for Asian investors (who trade later than in the United States), the trade war news changed post-market in regard to President Trump calling for a meeting with the Chinese president. Like the movements of previous weeks, gold and silver strengthened to new highs while crypto and the USD weakened. Likewise, bond markets fell marginally, with the 10-Yr Bond rate falling 0.72% as another rate cut hangs on the balance with the inflationary pressure of tariff threats.

Markets fell as President Trump made it clear on his own social media platform Truth Social that he would be implementing a new wave of tariffs on China as a result of their previous retaliatory moves, and on account of the country's lack of importation of soybeans from the United States. But providing some hope for investors has been Fed Chair Jerome Powell's address to the National Association for Business Economics that rate cuts may be on the horizon as inflation and job growth stagnated in the past month. "While official employment data for September are delayed, available evidence suggests that both layoffs and hiring remain low, and that both households' perceptions of job availability and firms' perceptions of hiring difficulty continue their downward trajectories," Powell stated.

As expected, the Magnificent Seven had a bad showing, with Nvidia retreating from its all-time highs from last week and, in fact, leading losses among the cohort, shrinking by 4.4% in share price.