Tue 14 Oct: After the Bell🔒

🎙️📄+ Market Data. Volatile equity session, oil drops, yields fall, bank earnings, Powell's signal.

See the ‘Market Data’ post for tables & charts.

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Good evening,

In a volatile session, US stocks initially fell sharply amid renewed trade tensions and surprise sanctions, with technology and AI stocks leading the decline. Later, markets recovered as investors seized buying opportunities, while strong results from major banks helped ease downside pressure at the start of the Q3 earnings season. Indices ended mixed, with the Nasdaq Composite losing 0.8% while the small-cap Russell 2000 gained 1.5%. Core bond yields resumed their downward trend following Monday’s holiday.

Crude oil prices dropped to a five-month low after the IEA reported a large surplus and a recent build-up in shipments. Brent fell as much as 3% but later recovered partially.

Geopolitics: China sanctioned US units of a South Korean shipping company on Tuesday, signalling a new tit-for-tat escalation in trade tensions. Beijing also promised broader retaliatory measures targeting the industry.

Crypto: Over $19bn in leveraged crypto positions were liquidated over the weekend, marking the largest single liquidation event in crypto history. Bitcoin traded as low as $110k today before recovering, down 13% from its all-time high last week.

Earnings: Major US financials delivered strong Q3 results, with JP Morgan, Goldman Sachs, Citigroup, Wells Fargo, and BlackRock all beating both revenue and profit expectations. Broad strength in trading, investment banking, and asset management supported the outperformance across the sector. Financing activity is accelerating, with mergers climbing and significant investments pouring into artificial intelligence, including the expansion of data centres and related infrastructure. Despite the strong results, bankers remain cautious about risks from a slowing labour market, asset bubbles, and geopolitical uncertainties. The financial sector significantly outperformed the broad market today. (see Market Data for table)