News Recap • Week 41 2025

Check the news below and make sure to visit my latest Market Recap as well.

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Markets crash on new US-China trade tensions

On Tuesday, US lawmakers called for broader bans on chipmaking tools to China. This came after a bipartisan investigation found that Chinese chipmakers had purchased $38 billion of sophisticated gear last year. This was notably just a report, however. No actions were taken by the US administration.

Next, seemingly as a response to the US lawmaker’s recommendation although the trigger is unclear, China on Thursday dramatically expanded its rare earths export controls. The country added five new elements and extra scrutiny for semiconductor users, while also adding dozens of pieces of refining technology to its control list and announced rules that will require compliance from foreign rare earth producers who use Chinese materials.

China produces over 90% of the world’s processed rare earths and rare earth magnets which are essential for high-tech industries including automobiles, defense and semiconductors.

Last but not least, President Donald Trump responded to China’s move. On Friday, he first threatened massive tariffs due to the rare earth dispute. The US stock market immediately started pulling back with losses escalating into the close. The broad indexes saw their biggest single-day decline since April.

Shortly after the market closed, Trump had seemingly made up his mind and announced a 100% tariff on all China imports, on top on the tariff rates already in place. With stock markets closed, crypto took a beating and saw its largest single-day liquidation event on record with almost $20 billion wiped out in a matter of hours. Many large-cap coins lost 50 - 80% of their market value in a massive flash crash around 5 pm EST.

It seems likely that the US and China will once again come to a resolution that suits both parties, just like they did after Trump’s initial tariff roll-out in April. As a matter of Fact, Vice President JD Vance said on Sunday that he and Trump appreciate their relationship with President Xi and that Trump hopes he won’t need to use leverage on China. Markets immediately jumped after JD’s statement and got another boost when Trump himself offered some optimistic remarks. Some reports even suggest that the whole situation got out of hand because of a misunderstanding.

However, it already seemed to be the consensus view among analysts on Friday that this was just the usual negotiation tactic from Trump. Because of that, I’m surprised the crypto market in particular reacted as violently as it did. We were probably due for a ~3% pullback in stocks and just needed a catalyst, but a 15% crash in Bitcoin feels like an overreaction. Next week will be an interesting one.

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In other news

Macro

• Mon Japan’s ruling Liberal Democratic Party elected Sanae Takaichi as its new leader, positioning her to become the country’s first female Prime Minister. Takaichi is expected to lead an accommodative economic policy and focus on boosting the Japanese economy. The Nikkei 225 surged 4.75% on the back of the news while the yen dropped almost 2% against the US dollar. The Japan 2-year yield plummeted 4% while the 30-year rose by an equal amount, pointing to expectations for rates to be lower in the short term with growth and inflation going up in the longer term. (CNBC)
• Mon French Prime Minister Sebastien Lecornu resigned just four weeks after getting appointed and hours after naming a new cabinet on Sunday. Lecornu said after his resignation that he “… was ready to compromise, but each political party wanted the other political party to adopt its entire program.” Investors reacted as you’d expect, sending French equities and bonds down along with the euro while gold caught a bid. (CNBC)
• Tue The World Trade Organization hiked its 2025 global trade growth forecast to 2.4%, up from its previous 0.9% estimate in August. However, it also cut its growth forecast for next year from 1.8% to just 0.5%. (CNBC)
• Wed The Senate rejected another set of proposed spending bills, thus extending the government shutdown. (CNBC)
• Wed The latest FOMC meeting minutes confirmed what we already knew. The Fed remains divided and uncertain about the best path forward. (CNBC)
• Wed Israel and Hamas agreed to the first phase of a Gaza peace plan brokered by the Trump administration. (CNBC)
• Fri The list of candidates for the role as Federal Reserve Chair has been narrowed down from 11 to five after a series of rigorous interviews held by Treasury Secretary Scott Bessent. According to Senior Treasury officials, the shortlist now includes Fed Vice Chair for Supervision Michelle Bowman, Fed Governor Christopher Waller, Director of the National Economic Council Kevin Hassett, former Fed Governor Kevin Warsh, and BlackRock Fixed Income CIO Rick Rieder. (CNBC)
• Fri The Trump administration reportedly began laying off federal workers as the government shutdown entered its 10th day. Unions representing government employees have already threatened lawsuits against the administration to fight the layoffs. (CNBC)
• Fri Chief Representative of Japan’s Komeito party said after a meeting on Friday that the ruling Liberal Democratic Party “failed to provide sufficient answers regarding political funding issues”, suggesting that Komeito may quit the country’s ruling coalition led by the LDP. This would be massive blow to newly-elected Sanae Takaichi who seemed set to become the country’s first female Prime Minister at the upcoming election on October 15. The Nikkei 225, which had rallied more than 5% since Takaichi was elected as party leader on Monday, fell 1% on Friday. (CNBC)

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Other

• Mon OpenAI will take a 10% stake in AI chipmaker AMD. The news sent shares of AMD soaring. (CNBC)
• Tue The Trump administration made its latest strategic investment, taking a 10% stake in Canadian minerals explorer Trilogy Metals. The stock popped more than 200% on the news. (CNBC)
• Tue Tesla debuted its new lower-priced Model Y and Model 3, pricing them just below $40,000. Analysts had been hoping for price points closer to $30,000 which may explain the stock’s 4.45% drop on Tuesday. (CNBC)
• Tue Dell almost doubled its annual profit growth target for the next four years, citing strong AI server demand. The stock rallied 9% on Wednesday after the news but gave it all back during Thursday and Friday. (Reuters)
• Tue NYSE-owner Intercontinental announced a $2 billion stake in prediction market platform Polymarket, valuing the latter at approximately $8 billion. (CNBC)
• Wed Nvidia CEO Jensen Huang said that demand for AI is growing exponentially and is up substantially this year alone. His comments seemed to calm fears of a CAPEX slowdown. Nvidia stock gained 2.2% on the back of it and another 1.8% to a new all-time high on Thursday. (CNBC)
• Wed HSBC made a bid to take Hang Seng Bank private at a $37 billion valuation. HSBC already owns 63% of the company. (CNBC)
• Thu Ferrari unveiled its first electric car, the Elettrica EV, and updated its guidance for the full year and 2030. The company set a revenue target of €9 billion for 2030, a significant increase from the €7.3 billion forecast from earlier this year but still shy of expectations. The lackluster guidance seemed to steal the show as investors sent shares down by 15% for their worst day on record. The stock dropped 21% on the week and went negative for the year. (Reuters)
• Thu Novo Nordisk said it will buy US-based Akero Therapeutics for up to $5.2 billion to gain access to its promising liver disease drug candidate that’s currently in late-stage trials. (Reuters)

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Earnings

• Thu PepsiCo reported a solid beat on both top and bottom lines. The company earned $2.29 per share vs $2.26 expected with revenue at $23.94 billion vs $23.83 billion. The stock rose 4.23% on Thursday after the report and added another 3.71% on Friday despite the massive market sell-off. (CNBC)