Week:
S&P500: +0.6% FTSE100: -0.8% Gold: +4.9% Bitcoin: -6.9%
YTD:
S&P500: 13.6% FTSE100: 13.3% Gold: +61.6% Bitcoin: +14.8%
Markets Ride Out Tariff Turmoil as Earnings Kick Off
Source: Connect Weekly | Week ending 18 October 2025
US stocks weathered another volatile week of trade headlines, earnings surprises, and speculation-driven swings. The S&P 500 and Nasdaq 100 ended higher, while the Russell 2000 lagged after a two-week run of record closes. Investors spent most of the week toggling between optimism on corporate earnings and anxiety over President Trump’s mixed messages on tariffs.
What drove markets this week
The week began with a sharp rebound as Trump softened his tone on China, sparking a powerful “risk-on” reversal led by AI and megacap tech. By Tuesday, that enthusiasm reversed after Trump suggested “terminating business with China” in a post about soybean purchases, reigniting tariff fears. Small caps still managed a new record close, while banks kicked off earnings season with a mixed bag — Wells Fargo and Citi rose, but Goldman and JPMorgan slipped despite strong results.
Wednesday brought another comeback, with the S&P 500 and Nasdaq 100 finishing higher after strong numbers from Morgan Stanley and Bank of America. AMD led tech higher again after HSBC hiked its price target, and the Russell 2000 posted another record close. The tone shifted Thursday as speculative favourites — from Bitcoin miners to nuclear energy plays — saw heavy selling. Banks also dragged on the broader market, while Oracle and Salesforce bucked the trend on upbeat AI and cloud guidance.
Trade fears fade into Friday rally
Markets regained their footing to end the week higher after President Trump dialed back his rhetoric on trade with China. The S&P 500 and Nasdaq 100 each rose about 0.5%, while small caps lagged. Consumer staples led sector gains, while defensive buying and short-covering lifted sentiment after a bruising Thursday. EssilorLuxottica hit a record high after saying strong sales of its Ray-Ban Meta smart glasses boosted revenue.
Earnings take centre stage
Early Q3 earnings results were broadly positive, particularly in financials and select tech. While growth stocks remain in control, leadership is showing signs of rotation as small caps and cyclicals respond more to rate expectations than to AI euphoria. Traders are also watching how margin commentary evolves as supply chains and trade policy remain fluid.
Looking ahead
All eyes now turn to the government shutdown timeline and next week’s inflation data, which could clarify the Fed’s path before its November meeting. With tariff rhetoric cooling and earnings season heating up, investors are hoping the focus shifts back to fundamentals — but in this tape, one post from the White House can still flip the mood in minutes.
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