TheDrop Market Analysis, 10/17/25

Markets rose higher as investors regained optimism following Trump's announcement that he will pursue negotiations with the People's Republic of China amid their ongoing trade war.

U.S. President Donald J. Trump, Getty Images.

The S&P 500 index rose 0.53%, the Dow Jones Industrial Average rose 0.52%, and the Nasdaq rose 0.52%, fueled by calming tensions between the United States and China. Meanwhile, the small business-heavy Russell 2000 fell 0.6% as the ongoing federal government shutdown has had adverse effects on key programs keeping these businesses running. The VIX volatility index collapsed 17.9%, reflecting the overall mild shifts experienced throughout the day.

Global ETFs sank as a result of poor U.S. credit quality having a ripple effect worldwide. The British FTSE 100 fell 0.86%, the French CAC 40 fell 0.18%, and the German Dax P fell 1.82% as of 5.13 PM EST. In Asia, the Hang Seng and the Nikkei 225 experienced similarly detrimental losses. Quite the reverse from yesterday, some cryptocurrencies strengthened in valuation while gold and silver commodities weakened, as the latter two goods suffer the effects of overvaluation.

Stocks have made a moderate reversal from yesterday as a result of the potential easing of the U.S.-China trade war, which was fueled by Trump's comments of negotiations. In addition, the president admitted the tariffs he proposed to be very unsustainable, sparking hope among investors that he would cave in to repealing much of his proposed trade restrictions on imported Chinese products. And, unemployment claims rose this week, leading to higher probabilities of a Federal Reserve rate cut within the next few months.

Oracle stock tumbled, marking a major correction since its double-digit surge just a few weeks ago, dropping Larry Ellison, chief shareholder of the ticker, down to second place in total net worth just behind Elon Musk.

Artificial intelligence confidence took a minor hit as ChatGPT's download rates are beginning to flatline, revealing that the room for growth in the industry is starting to run out. This is what contributed to the Magnificent Seven's marginal growth/stagnation today and is expected to impact tech stocks next week.

But what got investors worried today has been the intersection of a rapidly devaluing USD and bank stocks; although some tickers managed to reduce losses than previously expected, these fears continue to contribute to fears as the interest rate is expected to decline.