On Friday, major U.S. indices experienced sharp declines while Bitcoin and Ethereum plummeted. The U.S. President made strong statements on social media Friday, threatening to impose "massively increased tariffs" on Chinese goods. Following this announcement, Wall Street traders quickly hit the sell button as concerns over escalating trade tensions immediately overwhelmed the market's previous optimism.

**U.S. Stocks** At market close, the Dow Jones fell 878.82 points or 1.90% to 45,479.60; the Nasdaq dropped 820.20 points or 3.56% to 22,204.43; and the S&P 500 declined 182.59 points or 2.71% to 6,552.52. Both the Nasdaq and S&P 500 recorded their largest single-day declines since April 10.

Major technology stocks fell broadly, with Amazon (AMZN.US), Tesla (TSLA.US), and Nvidia (NVDA.US) each dropping approximately 5%, while Apple (AAPL.US) fell 3.45%. The Nasdaq Golden Dragon China Index closed down over 6%, with Alibaba (BABA.US) and Baidu (BIDU.US) both falling more than 8%, and Bilibili (BILI.US) declining 9%.

**European Markets** Germany's DAX 30 fell 427.04 points or 1.73% to 24,225.10; the UK's FTSE 100 dropped 82.55 points or 0.87% to 9,426.85; France's CAC 40 declined 123.36 points or 1.53% to 7,918.00; the European Stoxx 50 fell 99.31 points or 1.77% to 5,526.25; Spain's IBEX 35 dropped 128.79 points or 0.83% to 15,474.21; and Italy's FTSE MIB declined 781.60 points or 1.83% to 42,010.00.

**Oil Markets** NYMEX November light crude futures fell $2.61 to $58.90 per barrel, down 4.24%. December Brent crude futures dropped $2.49 to $62.73 per barrel, declining 3.82%.

**Cryptocurrency Market** The cryptocurrency market plunged after U.S. market hours, with Bitcoin falling 13.5% intraday, breaking below the $110,000 level to a low of $105,930. Ethereum crashed over 17% at one point, touching a low of $3,344. According to Coinglass data, over $7.4 billion in crypto positions were liquidated within 24 hours, with long positions accounting for approximately $6.7 billion and short positions about $695 million. The liquidations were primarily concentrated within a four-hour period on Friday afternoon U.S. time, with approximately $6.6 billion in positions being closed.

**U.S. Dollar Index** The dollar index, measuring the greenback against six major currencies, fell 0.56% to close at 98.977. At the New York market close, one euro traded for 1.1609 dollars, up from 1.1547 the previous day; one British pound exchanged for 1.3346 dollars, higher than 1.3281 previously. One dollar bought 151.72 Japanese yen, down from 153.18; 0.8013 Swiss francs, lower than 0.8074; 1.4000 Canadian dollars, down from 1.4031; and 9.5216 Swedish kronor, lower than 9.5587.

**Precious Metals** Spot gold reclaimed the $4,000 level, rising 0.91% intraday, while spot silver gained 1.86% to $50.172. Wheaton Precious Metals Corp CEO Randy Smallwood stated: "I believe gold prices will break through $5,000 next year... Following this trajectory, gold could easily reach $10,000 per ounce by the end of 2030. This wouldn't surprise me at all. The silver market has been in supply deficit for a long time." Silver inventories have been filling this gap, but these stocks are now "nearly depleted." Wheaton provides upfront financing to miners in exchange for discounted future production. Driven by heightened geopolitical risks and tight physical supply, investors are flocking to precious metals, causing gold prices to soar and benefiting Wheaton.

**Base Metals** LME copper fell $350 to $10,518 per ton. LME aluminum dropped $50 to $2,748 per ton. LME zinc declined $9 to $3,002 per ton. LME lead fell $10 to $2,020 per ton. LME nickel dropped $213 to $15,280 per ton. LME tin declined $887 to $36,173 per ton. LME cobalt rose $860 to $42,725 per ton.

Goldman Sachs said in a Friday report that it expects copper prices to remain in the $10,000-11,000 per ton range in 2026/2027. The bank added that Indonesian nickel producers' profit margins need to decline further to limit supply growth and reverse persistent market oversupply, predicting nickel prices will fall 6% to $14,500 per ton by December 2026. Goldman expects aluminum markets to show surplus as Indonesian supply increases from mid-2026, with aluminum prices expected to fall to $2,350 per ton in Q4 2026, not recovering to current levels until 2030.

**Macro News** Fed's Musalem expressed openness to further rate cuts, viewing them as additional insurance measures. He noted tensions facing Fed targets, with high inflation and potential labor market weakness signs. Balanced monetary policy can only work when inflation expectations are firmly anchored. If inflation expectations become uncontrolled, it will be harder to address short-term labor market volatility. Long-term inflation expectations remain stable, though near-term expectations for the next two years have risen slightly. Inflation remains significantly above target, with only 10% attributable to tariffs. The labor market appears near full employment but may be weakening. Tariff impacts on inflation are expected to fade in the second half of 2026. He supports September's rate cut to guard against labor market weakness and remains open to further cuts as additional insurance, though caution is warranted as policy space is limited before becoming too accommodative.

Trump administration officials confirmed that federal government mass layoffs have begun. Office of Management and Budget Director Russell Vought announced Friday that the Trump administration has started federal employee layoffs. Trump and Vought have repeatedly threatened to use government shutdown opportunities to dismiss thousands of federal employees, whom Trump often refers to as members of the "deep state." "RIFs have begun," Vought said when announcing the layoffs. These "Reductions in Force" (RIFs) are the latest blow to federal employees, who have already decreased by 200,000 this year. An OMB spokesperson confirmed that RIFs have started on a large scale, without specifying which departments were affected. One government official recently indicated that another 100,000 people are expected to leave by year-end.

Fed Governor Waller expressed hope to continue rate cuts but emphasized maintaining caution. He stated that job growth may have turned negative in recent months, making the labor market his primary concern. "Job growth in recent months may have been negative. The labor market is weak, which is the key policy point we need to understand." September's non-farm payroll report was delayed due to the government shutdown. Waller, appointed as Fed Governor by Trump in 2020, is currently a leading candidate to replace Powell as Fed Chair when Powell's term expires next May. Waller said his interviews progressed well, focusing on serious economic issues "without any political factors." He expressed hope to continue rate cuts while emphasizing caution among policymakers.

Sources indicate the EU plans to reach a new trade agreement with the U.S. The EU will work with the U.S. to develop a new plan for implementing the next phase of bilateral trade agreements, aiming to shelve Washington's proposal requiring the EU to withdraw certain regulatory measures that Trump has long criticized. The current idea is to create a "checklist" ensuring the agreement remains on track and progresses within parameters established by both sides this summer. Earlier reports indicated Washington requested Brussels modify several technical, digital, and corporate environment laws this month, which EU officials considered too demanding as negotiation starting points. The EU expressed readiness to discuss these issues and address concerns but will not abandon its regulatory autonomy. Sources said Brussels decided to shelve these demands and create a new list after EU Trade Commissioner Sefcovic and U.S. Trade Representative Greer held talks last weekend.

U.S. October consumer confidence remained flat with inflation expectations staying elevated. University of Michigan Consumer Survey Director Joanne Hsu reported that U.S. October consumer confidence remained steady. The consumer confidence index recorded 55 points, essentially flat from September. This month, consumers showed improved views on current personal finances and next year's business environment, but expectations for future personal finances and current durable goods buying conditions declined, offsetting each other. Overall, consumers see the economic outlook as largely unchanged from last month. "Wallet issues" like high prices and weak employment prospects remain consumers' top concerns, with no expectation of significant improvement. Meanwhile, interviews show almost no evidence that the ongoing federal government shutdown has changed consumer economic views. One-year inflation expectations fell from 4.7% last month to 4.6% this month but remain elevated. Long-term inflation expectations stayed stable at 3.7%.

**Individual Stock News** Morgan Stanley (MS.US) has reportedly lifted restrictions on wealth clients holding crypto funds. The company told its financial advisors Friday that it's expanding crypto investment access to all clients, allowing such investments in any account type, including retirement accounts. Starting October 15, advisors can market cryptocurrency funds to any client. Previously, this option was limited to clients with higher risk tolerance, at least $1.5 million in assets, and who wanted to hold crypto assets in taxable brokerage accounts. This move marks the latest expansion of client accessibility to crypto assets by the world's largest wealth management firm, following the U.S. government's shifted stance toward this emerging asset class with Trump's presidential election. Morgan Stanley announced last month that its E-Trade subsidiary would soon support trading in Bitcoin, Ethereum, and Solana. Sources revealed that as Morgan Stanley removes qualification requirements for crypto funds, the company will rely on automated monitoring processes to ensure clients don't become over-concentrated in volatile asset classes.