(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

Oct 13 - What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

The stories driving markets appear to be moving in loops faster

than investors can make significant adjustments, with Friday's

dramatic China trade threats seemingly reversed by Sunday and

the French Prime Minister who resigned last Monday now

reappointed and forming another cabinet.

Wall Street plummeted almost 3% and gold surged again on

Friday after President Donald Trump lambasted China's latest

rare earth export curbs and vowed to slap 100% tariffs on

Beijing, sending the S&P 500 to its worst weekly loss since May.

However, futures regained about half of that daily percentage

loss before Monday's bell after Trump on Sunday appeared to row

back on the move saying, "Highly respected President Xi just had

a bad moment. The U.S.A. wants to help China, not hurt it."

Trade Representative Jamison Greer said tensions rose after

Washington reached out to China for a phone call following last

week's announcement of expanded rare earths export curbs, only

for Beijing to defer. What's not clear is what the latest spat

means for rolling over the existing bilateral trade deal on

November 10 or whether an expected Trump-Xi summit will now take

place.

Meantime, China said export growth bounced back more than

forecast in September while it rekindled lost U.S. trade

elsewhere. Exports to the U.S. fell by 27% year-on-year but

shipments bound for the European Union, Southeast Asia and

Africa grew by 14%, 16% and 56% respectively.

The full fallout from the weekend's whiplash will be

difficult to parse with the U.S. government still in shutdown,

the Columbus Day holiday closing the Treasury market and stock

markets bracing for the onset of the U.S. corporate earnings

season from tomorrow. Two and 10-year Treasury yields plunged to

their lowest in almost a month on Friday's jolt and the dollar

recoiled - but the latter has regained some ground on Monday.

With the IMF/World Bank meetings taking place in Washington this

week and a closely watched appearance from Federal Reserve chief

Jerome Powell due on Tuesday, there was continued warnings about

overextended market valuations and the risks of a sharp

correction. "Valuations could now be at odds with the uncertain

economic and geopolitical outlook, leaving markets susceptible

to a disorderly adjustment," Financial Stability Board Chair

Andrew Bailey told G20 ministers in a letter.

* After Friday's tech-led slump, Asia opened lower but

stabilized

as Wall Street futures rebounded and hopes flickered for a

tariff truce extension, even as Beijing defended rare earth

export curbs. The dollar firmed against the yen and franc after

Friday's safety rush, while bullion set another record above

$4,070 as investors hedged policy and geopolitical risk. The

near-term risk skew for AI, EV and defense supply chains remains

sensitive to any tit-for-tat escalation.

* Political anxiety in Europe eased somewhat as French Prime

Minister Sébastien Lecornu was reappointed by President Emmanuel

Macron and is now about to appoint a new cabinet, keeping Roland

Lescure at finance and underscoring policy continuity despite a

divided parliament and a tricky 2026 budget path. European

equity benchmarks steadied after Friday's selloff, with futures

and cash markets edging higher to start the week.

* Earnings season kicks off Tuesday with JPMorgan, Goldman

Sachs,

Citigroup and Wells Fargo, and the market wants proof that

roughly 8.8% y/y S&P 500 EPS growth can support stretched

multiples. JPM and Wells are slated to release results around

7:00 AM ET (calls at 8:30 AM and 10:00 AM), Goldman at 7:30 AM

(call 9:30 AM), and Citi at 8:00 AM (call 11:00 AM).

In today's column, I discuss how "juiced-out" bonds may be

pushing money elsewhere.

Today's Market Minute

* The last surviving Israeli hostages began to be released

on

Monday as part of a ceasefire deal pushed by U.S. President

Donald Trump, who landed in Israel to address the parliament.

* U.S. companies and consumers are bearing the brunt of the

country's new import tariffs, early indications show,

contradicting assertions by President Donald Trump and

complicating the Federal Reserve's fight against inflation.

* The French presidency announced Prime Minister Sebastien

Lecornu's new cabinet line-up on Sunday, with most top jobs

remaining unchanged at a time when opponents are demanding a

political shift to win their support for urgent budget talks.

* The recent surge in suspected Russian "hybrid warfare"

incidents

across Europe has put governments on high alert, writes ROI

energy columnist Ron Bousso, raising questions about the

vulnerability of the region's energy infrastructure as the

continent enters the critical winter heating season.

* Is China's stockpiling of crude oil bearish or bullish for

prices? Unfortunately, writes ROI columnist Clyde Russell, there

is no clear cut answer to the question.

Chart of the day

Trade Representative Jamison Greer said on Sunday that the

U.S. reached out to China for a phone call following an

announcement that it was expanding its rare earths export

controls but Beijing deferred, while China accused the U.S. of

what it called "double standards." China's choke on rare earths

and magnets, where its near-monopoly position gives it

significant leverage in the trade war, could paralyse global

supply chains in industries from autos to green energy and

aircraft.

Today's events to watch

* World financial leaders gather for the IMF-World Bank

Annual Meetings, speakers on Monday include European Central

Bank President Christine Lagarde

* Philadelphia Federal Reserve President Anna Paulson

speaks; Bank of England policymakers Catherine Mann and Megan

Greene speak

* US corporate earnings: Fastenal

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Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.

(By Mike Dolan; Editing by)