20/10/2025
Global Markets Rise on Easing U.S.–China Trade Tensions and Strong Corporate Developments
Global financial markets began the week on a positive note, buoyed by easing U.S.–China trade tensions and solid corporate developments. Equity benchmarks in Europe and Asia advanced, with the Stoxx 600 gaining 0.8% led by banks, while MSCI’s Asia-Pacific and emerging-market indices rose 1.8% and 1.4%, respectively. U.S. stock futures also pointed higher, with S&P 500 and Nasdaq 100 contracts each advancing around 0.5%. Investor sentiment was further lifted by constructive signals from Washington and Beijing, suggesting a potential de-escalation in tariff threats and renewed talks between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. President Trump indicated that his proposed 100% tariff on Chinese goods was “not sustainable,” and both sides described recent exchanges as constructive. A planned meeting later this month between Trump and President Xi Jinping reinforced optimism for a trade détente.
The shift in tone helped calm markets unsettled by earlier concerns over U.S. regional lenders and a prolonged government shutdown. The shutdown, now entering its third week, has delayed key economic releases, including the September Consumer Price Index, which is now scheduled for Friday, October 24th. The data will be closely watched ahead of next week’s Federal Reserve meeting, as investors gauge whether inflationary pressures remain persistent. Economists caution that the shutdown could temporarily weigh on U.S. GDP growth but expect any impact to be short-lived.
In corporate developments, Kering SA surged more than 4% after announcing a €4 billion agreement to sell its beauty division, including the House of Creed, to L’Oréal SA. The deal grants L’Oréal long-term exclusive rights to develop and distribute beauty products for Gucci, Balenciaga, and Bottega Veneta, and includes a joint venture focused on wellness and longevity. The transaction, pending regulatory approval, is expected to close in the first half of 2026. The move aligns with Kering’s strategy to streamline operations amid soft luxury demand in China and the United States.
In the technology sector, Apple’s newly launched iPhone 17 series outperformed expectations, with initial sales up 14% year-on-year in the U.S. and China. The base model led the surge, nearly doubling unit sales in China compared to its predecessor, while the Pro Max dominated in the U.S. on the back of increased carrier subsidies. The robust performance underscores resilient consumer appetite for high-end electronics despite broader macroeconomic uncertainty.
In fixed income, French bonds weakened after S&P Global Ratings downgraded France’s sovereign credit rating to A+ from AA-, citing fiscal uncertainty. The downgrade leaves France without a double-A rating at two major agencies, potentially prompting adjustments by funds with strict investment-grade criteria. U.S. Treasuries and the dollar traded steady.
Commodities markets saw gold prices stabilizing after a sharp pullback from record highs, with spot bullion hovering near $4,257 an ounce as traders weighed diminished safe-haven demand amid improved risk sentiment. Oil prices edged lower, extending a three-week losing streak despite heightened geopolitical tensions following renewed conflict in Gaza, where Israel launched strikes against Hamas targets.
Looking ahead, markets face a data-heavy week with major earnings reports from Tesla, October 22nd, Netflix October 21st, and Intel, October 23rd, alongside the delayed U.S. inflation print and ongoing trade discussions. While short-term volatility remains likely, investors appear broadly optimistic that improving trade relations and resilient corporate performance could underpin risk assets through the coming sessions.
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