[New York Stock Exchange] Mixed Close as Trump’s 'Offensive Against China' Rattles Markets with Shifting Remarks

Trump Considers Halting Cooking Oil and Certain Trade with China on Social Media
Tensions Escalate Ahead of U.S.-China Summit at Month’s End
Stock Market Swings as Trump Alternates Between Hardline and Conciliatory Remarks
Powell Signals En

The three major indices of the New York Stock Exchange closed mixed on October 14 (local time). As U.S. President Donald Trump made tough remarks against China, concerns over a renewed U.S.-China trade war resurfaced, causing the stock market to give up earlier gains just before the close. Ahead of the U.S.-China summit scheduled for the end of this month, President Trump has alternated between hardline statements and conciliatory gestures to maximize his negotiating power, resulting in the market repeatedly fluctuating between gains and losses.

On this day, the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 46,270.46, up 202.88 points (0.44%) from the previous trading day. The S&P 500 Index, which tracks large-cap stocks, fell by 10.41 points (0.16%) to 6,644.31, while the Nasdaq Composite Index, which is centered on technology stocks, dropped by 172.907 points (0.76%) to 22,521.701.

At the start of the session, the market opened lower after the Chinese government announced sanctions against the U.S. subsidiary of Hanwha Ocean, which leads Korea-U.S. shipbuilding cooperation. However, the market reversed to gains after Jerome Powell, Chair of the U.S. Federal Reserve, hinted at ending quantitative tightening (QT), also known as balance sheet reduction, within the next few months. The rebound was interrupted again by President Trump’s tough remarks toward China.

President Trump posted on his own social networking service, Truth Social, stating, "China's deliberate refusal to buy our soybeans is an act of economic hostility that puts American farmers in a difficult position," and added, "As a retaliatory measure, we may halt business with China related to cooking oil and other trade items." He further stated, "We can easily produce cooking oil ourselves," and "There is no need to purchase it from China."

Ahead of the U.S.-China summit scheduled to coincide with the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea, at the end of this month, both sides have been taking measures targeting each other. After China imposed export controls on rare earth elements aimed at the U.S., President Trump announced plans to impose an additional 100% tariff on Chinese goods starting in November. Two days after the additional tariff announcement, on October 12, he delivered a conciliatory message, saying, "I am trying to help China, not hurt it," but two days later, he resumed his offensive stance.

Market analysts interpret this as President Trump attempting to appease his core supporters, American farmers, while simultaneously seeking to strengthen his negotiating position ahead of trade talks with Chinese President Xi Jinping.

Rob Haworth, Senior Investment Strategy Director at US Bank Wealth Management, commented, "It is unclear what direction U.S.-China relations will take at the end of this month regarding trade tensions," and added, "Although financial company earnings and consumer sentiment announced this morning were positive, trade tensions between the U.S. and China are one of the factors influencing market sentiment."

Wall Street is anticipating increased market volatility going forward. Florian Ielpo, Head of Macro at Lombard Odier Investment Managers, said, "This sharp reversal shows how quickly market sentiment can change," and predicted, "With the market already vulnerable due to high valuations, volatility is likely to persist."

By sector, financial stocks were generally weak despite strong third-quarter earnings. JPMorgan fell 1.91%. Goldman Sachs declined 2.04%. Wells Fargo surged 7.15%. Technology stocks also dropped, with Nvidia down 4.4% and Oracle down 2.93%.

U.S. Treasury yields declined. The yield on the 10-year Treasury note, the global benchmark for bond yields, fell by 2 basis points (1bp = 0.01 percentage point) from the previous day to 4.03%. The yield on the 2-year Treasury note, which is sensitive to monetary policy, also dropped by 3 basis points to 3.48%.