NEW YORK (Reuters) -Making sense of the forces driving global markets

By Alden Bentley, Editor in Charge, Americas Finance and Markets

Jamie McGeever is enjoying some well-deserved time off, but the Reuters markets team will still keep you up to date on what's happening in markets. U.S. central bank chief Jerome Powell steadied the market, which has been whipsawed in recent sessions by a flare-up in U.S.-China trade tensions. I'd love to hear from you, so please reach out to me with comments at [email protected]

Today's Key Reads

Fed's Powell says economy may be on firmer footing, but job market weak

US, China roll out tit-for-tat port fees, threatening more turmoil at sea

US banking giants buoyed by dealmaking, but warn of asset price bubbles

Wall Street's fear gauge climbs as US-China trade fears rise

Long Treasury yields to stay elevated as inflation, debt pressures blunt Fed easing: Reuters poll

Today's Key Market Moves

STOCKS: The S&P 500 and Dow shook off early losses, steadying on the back of comments by Federal Reserve Chair Jerome Powell and strong earnings from JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo. The S&P closed slightly lower, but the Dow held gains while the Nasdaq remained on the ropes all day amid a pullback in tech shares.

SHARES/SECTORS: Wells Fargo and Citi were up sharply while JPMorgan and Goldman shares were lower. Financials are the top-performing S&P 500 sector on the day, followed closely by Industrials, led by Caterpillar after JPMorgan raised its price target. Market cap leader Nvidia was down sharply and Information Technology was the only losing sector.

FX: The U.S. dollar eased. The safe-haven Swiss franc and Japanese yen gained following renewed signs of strain in U.S.-China trade relations, while the euro was supported after the French government proposed to suspend landmark pension reform.

BONDS: U.S. Treasury yields declined as concerns about trade tensions between China and the U.S. dented risk appetite, while Powell's comments suggested the Fed remained on course to cut rates.

COMMODITIES: Oil prices tumbled after the International Energy Agency warned of a huge supply glut in 2026. Gold prices set a new record high on rising expectations of a U.S. Federal Reserve rate cut this month and safe-haven demand on trade tensions between the world's two largest economies.

CRYPTO: Bitcoin fell as low as $110,023.78 and was last down 1.9%. The world's largest cryptocurrency hit a record high above $126,000 on October 6.

Today's Key Talking Points

After major U.S. indexes fell again overnight, bulls recaptured control following comments by Federal Reserve Chair Jerome Powell that reassured investors that even without the latest government data, indications were the economy remained on a firm trajectory, while labor market conditions were not a deal breaker for further easing. He also reduced concerns about tight financial conditions by holding out the prospect of ending the Fed's balance sheet run-off.

At the same time, solid results from some of the nation's largest banks set up earnings season on a positive note.

The Cboe Volatility Index jumped to its highest in nearly five months before paring gains, reflecting the whipsaw stock market action since Friday on renewed concerns over a U.S.-China trade conflict. For the moment tariffs seem to have reclaimed top position as the market influence from Artificial Intelligence. AI excitement helped lift the S&P 500 to record highs last week and the benchmark is only about 1% away.

Wall Street started the session on the back foot after Washington and Beijing moved to slap tit-for-tat additional port fees on ocean shipping firms. The previous two sessions saw a bungee-like drop and rebound after U.S. President Donald Trump threatened, then seemed to downplay, punishing China over rare earth export controls with 100% tariffs on Chinese goods.

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What could move markets tomorrow?

* Bank of America, Morgan Stanley, United Airlines report earnings

* Numerous Fed officials speak, including recent Trump appointment to the Board of Governors Stephen Miran participating at a CNBC forum in Washington DC

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.

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