The Big 3Monday, October 27, 2025 A quick look at the top stories we’re following this week.Weekend talks with China buoy investors. U.S. equities and ETFs soar to new heights pre-bell Monday over renewed optimism that the two sides could soon strike a new trade deal.All eyes on the Fed. The expectation is that the Federal Reserve’s meeting later this week will yield another interest rate cut. A flood of tech earnings on the way. Megacap stocks including Apple, Amazon, and Alphabet will post Q3 numbers this week.This week’s Company Earnings Announcements at a glanceVisa Inc. (V)--Tuesday, 10/28UnitedHealth Group Incorporate (UNH)--Tuesday 10/28Microsoft Corporation (MSFT)--Wednesday, 10/29Alphabet Inc. (GOOG)--Wednesday, 10/29Meta Platforms, Inc. (META)--Wednesday, 10/29Caterpillar Inc. (CAT)--Wednesday, 10/29Verizon Communications (VZ)--Wednesday, 10/29

As the U.S. government shutdown drags into Week 5, and with no end in sight, it seems we’ve crossed the bureaucratic event horizon, where nothing, not even logic or reason, can escape Washington D.C.’s dysfunctional political gravity. Most analysts predicted that the broader economic fallout of the shutdown would be modest, provided that both sides reached an agreement in short order.Few analysts predicted that both sides would reach an agreement in short order. President Trump presided over the longest stalemate in history, a 35-day partial shutdown that stretched between 2018 and 2019. According to the Congressional Budget Office, that shutdown cost the U.S. economy roughly $3 billion. The current shutdown is actually a full shutdown, rather than a partial one. This is because the government is currently without a spending appropriations bill. As a result, all “non-essential” government services have been halted; their workers furloughed. On Wednesday of this week, the current shutdown reached its 22nd day, surpassing the previous high mark set in 1996, when the Clinton administration faced a full government shutdown for 21 days.So what kind of fallout are we looking at here?Federal workers are already missing paychecks. If the shutdown stretches into November – and it seems like it will – government benefits such as the Supplemental Nutrition Assistance Program (SNAP) may be suspended, which could have a devastating impact on low-income households. Private industries already facing perilous economic conditions find themselves in a holding pattern as they wait for delayed permits. There is a bright spot here.Right. Corporate America is crushing life right now. Earnings season kicked into high gear over the last two weeks. And though just 13% of S&P 500 companies had reported Q3 earnings by midweek, more than 85% of them are beating Wall Street projections. Companies like General Motors, Coca Cola, and JPMorgan celebrated expectation-shattering reports. Though, Elon Musk was not invited to the party. On Wednesday, Tesla reported a 12% increase in Q3 revenue–its first gain after two down quarters. But its earnings fell short of analyst expectations due to an excess of capital expenditures. The revelation sent investors skittering away from the EV maker as its stock took a 5% hit on the day.Markets broadly followed suit, with all three major indices – the S&P 500, Nasdaq, and Dow Jones – finishing down. The closing bell snapped a three day win streak and marked the worst trading session in two weeks.Analysts called the week’s downturn a mere speed bump on rally road. Well, even as corporations post positive earnings, continued uncertainty over trade with China has investors on edge. By Thursday, the S&P and Nasdaq returned to business as usual, posting positive gains in early trading.But if we continue to ratchet up the stakes in our trade war with China, the next speed bump could be bigger. Not only that, but the Federal Reserve is staring down another likely rate cut as it prepares for its late October meeting. Only, this time, the Fed is navigating sustained inflation and a stalling labor economy during a government shutdown. This means the central bank will be making this critical decision without access to figures on retail sales or unemployment rates for the month of October. That’s right, old friend. But fear not. Friday did bring a glimmer of hope in the form of this month’s CPI report. Figures showed monthly inflation slowing to .3%, a slight tick below the expected .4%. Evidence of softening price pressures is pushing the Dow and Nasdaq back into record territory as the week draws to a close.So that’s cause for some weekend celebration. And we suggest you make the most of it. Because with the government out of commission, it may be the last CPI report we get to see for a while.

For months, it seemed as though there was little that could derail the stock market’s sustained hot streak. Then President Trump fell victim to one of the classic blunders… Last Friday, Trump threatened to impose 100% tariffs on all imports from China. The markets didn’t think it was so nice. On the day of Trump’s announcement, U.S. stocks shed a cool $2 trillion in value. This was followed closely by a 15+% dip in the value of Bitcoin. By midweek, the CBOE Volatility Index (VIX) surged to its highest level since May. The VIX is sometimes also referred to as Wall Street’s “fear gauge.” That’s because the VIX tends to go up when investors are expecting a downturn in the markets.So what’s this all about?The Trump administration calls its 100% tariff threat a retaliatory gesture. Last week China announced that they would no longer be exporting “rare earths” for use by foreign militaries. Rare earths are minerals that are used to produce the magnets for things like electric cars, airplanes, laptops, cell phones, semiconductors. You know–all the things.But rare earths are especially used in the thing below, and all the things on this thing. The U.S. gets 70% of these metals from China. Indeed. And after months of de-escalating tensions, these events have thrust the U.S. back into a tit-for-tat with China that promises to impact consumers of more than just military-grade weaponry. Trump claimed on Truth Social this week that China has been intentionally undermining America’s farmers.How exactly? That’s right. In most years, China accounts for 40% of all U.S. soybean exports. That number fell to roughly zero in 2025, when the Trump tariffs prompted China to look to Argentina and Brazil for its soy. Trump is consequently vowing to shut down U.S. imports of Chinese cooking oils if China doesn’t start buying our beans again soon. China may be tightening the reins on its rare earth exports as a preemptive response. But the bigger picture here is that China intends to use its control over the global rare earths sector as a bargaining chip ahead of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea at the end of the month. While it is not clear at the moment whether Trump and Chinese President Xi Jinping will enjoy one-on-one time, they will both be in attendance. The U.S. did offer a way out, suggesting that China could still avert the tariff hikes by pulling back on its export controls before the summit. Otherwise, things could be awkward during the big get-together in Gyeongju. At the moment, China seems reluctant to change its course. “Resorting to threats of high tariffs is not the right way to engage with China,” said a Ministry of Commerce spokesperson this past Sunday. Trump disagreed.“Don’t worry about China, it will all be fine!" Trump posted on Truth Social. "Highly respected President Xi just had a bad moment.” Beijing insists that “If the US persists in acting unilaterally, China will resolutely take corresponding measures to safeguard its legitimate rights and interests.”But President Trump expressed confidence that his threat would only strengthen relations between the world’s two largest superpowers. He wrote that President Xi “doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!" Well, China doesn’t quite seem ready to hug it out.So where does that leave things? If we are on a collision course with 100% tariffs, that would be on top of the existing 44% tariffs on Chinese goods. Economists warn that this would bring global trade between the two nations to a near standstill, ripple throughout the global trade landscape, impose serious cost burdens on private industries, and tank global markets. Investors in Asia, the U.S., and really across the world calmly await some amicable resolution to this latest trade kerfuffle. In the meantime, investors can only cling to each Trump post and presser for clues of what comes next. But therein lay the challenge. Richard Portes, a Professor at the London School of Economics, sums up the dynamic between the world’s two largest economies this way:“China has stable, clear and determined objectives. The Trump administration changes from day to day, in its views and its policies.” Obviously, that makes it pretty tough to predict what happens next. Clearly, the markets agree. All three major U.S. indices are vacillating between gains and losses as we head into the weekend. With so few sure things, we must take comfort in life’s certainties. We’re certain it’s Friday, and that’s always a good thing.