Trade War Shifts to Ag, but Earnings, Fed in Focus
Published as of: October 15, 2025, 9:15 a.m. ET
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Major index values are as of Tuesday's close; others are as of 8:46 a.m. ET.
(Wednesday market open) History gave us the Opium Wars and the Trojan War. This month's feud began over rare earths but became the war of the soybean after President Trump criticized China for not buying U.S. oilseeds and threatened to stop U.S imports of Chinese cooking oil. That put trade concerns back on page one, despite competition from bank and semiconductor earnings.
Before soybeans made headlines, stocks got a boost yesterday when Federal Reserve Chairman Jerome Powell suggested that Fed could end its "quantitative tightening" program, which shrinks the Fed's balance sheet to slow inflation by reducing liquidity. Ending it wouldn't mean a return to stimulative policy but would remove one headwind for risk assets. Still, the S&P 500 index and the Nasdaq Composite fell Tuesday and haven't fully recovered from last Friday's trade-related sell off. Today features five Fed speakers, and chances of a rate cut this month are 98%, according to the CME FedWatch Tool.
While trade concerns didn't vanish overnight, earnings are starting to make themselves felt, sending major indexes higher early Wednesday. ASML (ASML), an important supplier of equipment used to make chips, impressed with its outlook, helping semiconductor stocks. Then came results from Morgan Stanley (MS) and Bank of America (BAC), which also impressed and sent their shares higher in pre-market trading. "Although it’s early in earnings season, so far, so good," said Liz Ann Sonders, chief investment strategist at Schwab. "There’s been an uptick in consensus to more than 9% year-over-year growth."
Three things to watch
- How to know if rally is at risk: The latest stretch of volatility amid trade tensions could provide traders another "buy the dip" opportunity or signal a need for more caution. How can investors tell? While the intermediate-to-longer term looks bullish and intact, the near term looks a bit cloudy. For example, the S&P 500 index saw its biggest single-day drop since April last Friday, along with a third consecutive daily close below the 20-day simple moving average on Tuesday. This is the first time in nearly six months to see the S&P 500 close three-straight days beneath this indicator, a solid technical support level. It's too early to say whether this is merely a "hiccup" in the longer-term uptrend, but it's worth monitoring in coming sessions. If the SPX closes back above the 20-day moving average, now near 6,672, then the technicals incrementally improve. Another indication could be price action toward the daily closes. Keep track of whether stocks close near the highs or the lows of the day. Closing near the lows could mean a shift in near-term sentiment, suggesting traders want to be cautiously positioned at the end of the day. Last, check price action around the latest AI deals and partnerships. "It's been healthy thus far, but if the 'good news' stops getting rewarded via higher share price, this could be sending a signal that it's already priced in," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research.
- As risk-off sentiment rises, so does gold: The price of gold (/GC) hit a new record above $4,100 per ounce Tuesday, up more than 55% year over year. That's the strongest gain since December 2009. The dollar and U.S. Treasuries also resumed their rallies Tuesday as "risk-off" sentiment dominated, and investors looked for perceived safety outside the stock market. Though volatility and uncertainty have risen over the last week, a few days of softness haven't necessarily changed the upward trend for equities. Some advisors recommend gold to provide diversification and as a potential hedge against risk in periods of stress for the stock and bond markets, but owning gold has risks of its own. Many investors choose to invest in gold mining stocks and gold exchange-traded funds to have exposure to the yellow metal. But diversification beyond owning gold bars and coins doesn't eliminate the risk of loss. And gold can have long periods of unrewarding trading. For almost a decade heading into 2020, for instance, gold prices were flat. The recent climb for gold started in early 2024 when gold had traded for years around $2,000. That means it's risen about 100% in less than two years, more than double what the red-hot stock market has done.
- Chip stocks edge up after ASML soothes worries: ASML jumped 4.5% ahead of the open as investors mulled its latest earnings report. Though the company missed revenue expectations, the focus seemed mainly on guidance, which disappointed last time out. This time it was different, with ASML saying it doesn't expect sales to fall in 2026 from 2025 and forecasting annual sales to rise 15% this year. ASML cited "continued positive momentum around investments in AI," which has extended to more of its customers but warned that business in China will be "significantly lower." Nvidia (NVDA) is up this morning, helped by ASML's guidance as well as an upgrade to Buy from HSBC. Nvidia shares plunged 4.4% on Tuesday, hurt by competitive fears. Its losses came as rival Advanced Micro Devices (AMD) added nearly 1%, boosted by news that the Oracle Cloud will deploy 50,000 AMD graphics processors starting late next year. AMD's coming MI400 series could make it a more serious rival to Nvidia’s chips, Barron's reported. Semiconductor stocks other than Nvidia were also up today after the ASML news, including Broadcom, Marvell Technology (MRVL), Micron (MU), AMD, and Intel (INTC). ASML is a canary in the coal mine because it's the only company making extreme ultraviolet lithography machines to produce the most sophisticated chips, Bloomberg noted.
On the move
- Morgan Stanley (MS) rose more than 3% in pre-market trading after easily topping analysts' earnings and revenue estimates, helped by solid trading activity and investment banking. This follows better-than-expected results yesterday from several other large banks, though share performance was mixed for the sector Tuesday.
- Bank of America (BAC) soared 5% ahead of the open, propelled in part by a 43% jump in quarterly investment banking revenue. The strong stock market this summer and easing U.S. regulations have opened up the market for initial public offerings and mergers, while the steepening U.S. yield curve has helped net-interest income for BAC and other major financial firms.
- United Airlines (UAL) rose 0.7% early Wednesday ahead of its earnings due after the close. Delta (DAL) reported a solid quarter last week and said travel demand is improving. The question is whether United sees the same trends. Last time out, United lowered its annual earnings guidance, citing weaker travel demand and global uncertainty.
- Taiwan Semiconductor Manufacturing (TSM) jumped nearly 4% ahead of its earnings due early tomorrow. Results could have heavy implications in the current climate of chip trade tension with China, and investors will likely want to hear about any impact on future demand if the two trading giants can't resolve their feud.
- The dollar and U.S. Treasuries went separate ways Tuesday, with Treasuries supported by Powell's somewhat dovish comments and the dollar coming off of recent highs but not by much. These two assets are worth following today for any sense of risk-off versus risk-on sentiment.
- PNC Financial Services (PNC) dropped 3.5% this morning despite beating Wall Street's revenue and earnings expectations. Shares fell on guidance for fourth quarter revenue that missed consensus, Briefing.com noted.
- U.S.-listed shares of luxury conglomerate LVMH (LVMH) rose 2% in pre-market trading after it reported earnings growth for the first time this year, Barron's reported.
- Archer-Daniels-Midland (AMD) climbed more than 3% this morning and Bunge Global (BG) added 5% as Trump's threat to end imports of Chinese cooking oil drove investors into U.S. agricultural giants. The U.S. was China's top market for used cooking oil last year, importing a record 1.27 million metric tons worth $1.1 billion, Reuters reported. However, imports have fallen dramatically this year.
- The VIX fell nearly 7% this morning to 19.41 but remains well above levels seen before Friday's sell off, suggesting choppiness could continue amid trade uncertainty.
- Bitcoin (/BTC) fell another 1% today and is now about $15,000 below its recent all-time high. Technically there are signs of weaker momentum. Bitcoin futures fell below their 50-day moving average near $115,600 this week. However, crypto-related stocks rose in pre-market trading today.
- Technically, the S&P 500 index is rattling around between key levels marked by the 50-day moving average below and the 20-day moving average above. The 20-day moving average near 6,672 remains a resistance point.
More insights from Schwab
Shutdown—what's next: Get up to date on the government shutdown and its possible impact on markets in Schwab's latest update from Washington. There have been seven failed Senate votes on a temporary funding extension, noted Michael Townsend, managing director, legislative and regulatory affairs at Schwab. The administration is firing furloughed workers, and a bipartisan group of senators is seeking a deal.
Overbought or oversold? If you want to buy low and sell high, it's important to understand what's high and what's low in the first place. But that's not so easy. An overbought or oversold reading in one set of conditions can mean something much different under others. And arguably, the most important of those conditions is the trend. Learn more about how to read market conditions in Schwab's latest look at trading.
Talking money with aging parents: It may be difficult to have these conversations, but it's important to understand your elderly parents' decisions and have proper documents in place. Learn five money topics to discuss in Schwab's latest financial planning article.
Chart of the day
Data sources: CME Group, S&P Dow Jones Indices. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Recent volatility has some investors wondering again if they should consider gold (/GC—candlesticks) as an alternate to stocks (SPX—purple line). But history shows that gold and stocks don't always go different ways. While gold rallied when volatility hit the stock market in early 2020 during the pandemic and early this year on tariff fears, gold was flat despite the stock market going up in 2021 and then having a bear market in 2022. Then gold rallied along with stocks late this year, partly on hopes for Fed rate cuts.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
October 16: September PPI, September core PPI, September retail sales, and expected earnings from Taiwan Semiconductor (TSM), Marsh & McLennan (MMC), U.S. Bancorp (USB), Infosys (INFY), Travelers (TRV), and CSX (CSX).
October 17: September housing starts and building permits and expected earnings from American Express (AXP), Truist (TFC), SLB (SLB), State Street (STT), Fifth Third Bancorp (FITB), and Regions Financial (RF).
October 20: September Leading Indicators and expected earnings from Cleveland-Cliffs (CLF), Steel Dynamics (STLD), Zion's Bancorporation (ZION), and W.R. Berkley (WRB).
October 21: Expected earnings from Verizon (VZ), Coca-Cola (KO), 3M (MMM), GE Aerospace (GE), Elevance Health (ELV), RTX (RTX), Lockheed Martin (LMT), General Motors (GM), Halliburton (HAL), PulteGroup (PHM), Philip Morris (PM), Northrop Grumman (NOC), Netflix (NFLX), Texas Instruments (TXN), Chubb (CB), and Mattel (MAT).
October 22: Expected earnings from Tesla (TSLA), IBM (IBM), SAP (SAP), Thermo Fisher Scientific (TMO), AT&T (T), GE Vernova (GEV), Boston Scientific (BSX), CME Group (CME), Vertiv Holdings (VRT), and Lam Research (LRCX).
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