October 20, 2025 — Last week, global markets showed a mixed pattern amid the tug-of-war between policy uncertainty and corporate earnings resilience. Spot gold surged past $4,380/oz, marking its ninth straight weekly gain; all three major U.S. stock indexes closed higher, with the Nasdaq up 2.14% for the week. The U.S. dollar index fell to 98.53, 10-year Treasury yields dropped below 4%, and crude oil prices fell for a third consecutive week as supply-demand imbalances worsened. The dominant market themes remained the interplay between Fed rate-cut expectations and rising geopolitical tensions.
U.S. Equities: Earnings Season Opens Steadily, Bank Volatility Spikes
Index performance:
S&P 500 +1.7% (weekly)
Dow Jones +1.56%
Nasdaq +2.14%, led by tech names such as Broadcom and Tesla.
Risk events: On October 16, regional U.S. banks lost over $100 billion in market cap in a single day, as Zion Bank plunged 15% following a loan fraud scandal.
Fundamental drivers:
Earnings resilience: JPMorgan and Bank of America both beat Q3 earnings expectations; while net interest margins remained under pressure, overall credit quality stayed sound.
Policy support: Fed Chair Powell hinted that “balance sheet reduction may soon end.” Markets are now fully pricing in a 25 bps rate cut in October.
Precious Metals: Gold Hits Record High, Silver Sees Roller-Coaster Swings
Market recap:
Spot gold hit a new record at $4,380/oz, up nearly 6% on the week—its ninth consecutive weekly gain.
Silver briefly topped $54, then plunged 6% on Friday to $51.73, still up 3.5% for the week.
Key drivers:
Surging safe-haven demand: The U.S. government shutdown entered its third week (the second-longest in history), and the Middle East ceasefire remains fragile.
Central bank buying: Global central banks have purchased over 800 tons of gold this year; Standard Chartered raised its 2026 gold price forecast to $4,488/oz.
Technical extremes: Gold’s RSI remains deeply overbought; the Shanghai Gold Exchange issued a “position control” advisory.
FX and Bonds: Dollar Weakens, Yields Break Lower
Dollar Index: Fell 0.7% to 98.53, its biggest weekly drop since July.
Treasury market: 10-year yields broke below 4%; Fed’s SRF (Standing Repo Facility) usage surged to $6.75 billion, the highest non-quarter-end level since COVID.
Macro logic: Trump’s threat to impose a 100% tariff on Chinese goods dampened risk appetite, prompting flows into alternative safe-haven currencies like the Swiss franc.
Commodities: Oil Slumps to $58, IEA Warns of Looming Oversupply
WTI crude: Down 4.2% for the week to $58/barrel; Brent fell below $62.
IEA warned of “severe global oversupply by 2026.”
EIA reported consecutive inventory builds; OPEC+ confirmed its November output increase plan.
Structural floor: $57.50 marks the marginal cost line for shale oil—a break below could trigger supply cuts.
Crypto: Paxos Glitch Triggers Brief Turmoil
Bitcoin: Down 2.3% to $112,000.
Ethereum: Down 4.5%.
Incident: Paxos accidentally minted 300 trillion PYUSD tokens (worth about $300 trillion)—later burned within 22 minutes. DeFi platform Aave froze related markets.
Sentiment: While rate-cut expectations support liquidity, regulatory uncertainty continues to curb speculative appetite.
Earnings Season Peaks This Week
Tech: Tesla, Intel, and AT&T (Oct 22–24) — focus on AI capital expenditure guidance.
China ADRs: China Telecom and China Unicom (Oct 23) — digital economy transformation to be a highlight.
Market impact: FactSet expects S&P 500 Q3 earnings to rise 8.4% YoY; any upside surprise could reinforce risk appetite.
Key Events to Watch This Week
U.S. government shutdown: If unresolved, the Sept CPI report (Oct 24) may be the only critical data point before the October FOMC meeting.
Japan PM vote (Oct 21): After the LDP–Komeito split, Sanae Takaichi’s election outcome will guide yen sentiment.
EU summit: Discussion on tariffs for Chinese EVs—potential volatility for clean-energy stocks.
U.S. Sept CPI (Oct 24, 20:30): Expected +3.1% YoY (vs. prior 2.9%); core CPI also at 3.1%.
Global PMI Flash (Oct 24): Weak readings from Europe/US could heighten recession fears.
Fed quiet period: Ahead of the Oct meeting, no public comments allowed; markets will rely on inflation data to recalibrate expectations.
ECB’s Lagarde speech (Oct 22): Watch for phrasing on “the last mile” of inflation control.
Central bank meetings: Turkey, South Korea, Russia — focus on whether emerging-market rate cuts continue.
