Trump killed the AI hype
What a fragile and unreliable market this is right now. Just a hint from U.S. President Donald Trump about possible trade restrictions with China was enough to send the markets tumbling from their recent highs.
On Friday, President Trump announced plans to impose a 100% tariff on all Chinese exports to the United States in response to China’s restrictions on the export of critical minerals. He also said the U.S. would tighten export controls on certain software deemed vital to national security.
The news immediately rattled global markets, heightening concerns about a slowdown in regional exports. Notably, Trump’s remarks came amid weak Chinese macroeconomic data and growing investor anxiety over tighter policies in major economies.
As a result, stocks, oil, and especially cryptocurrencies took the hardest hit, as markets were swept by a wave of heavy selloffs. Until Friday, traders had been in an upbeat mood, but Trump’s comments quickly erased that optimism. The slump wiped out the week’s earlier gains and pulled the indices down from record highs. By the end of the week, all major U.S. indexes closed with sharp losses: the Dow Jones fell 2.73%, the S&P 500 dropped 2.43%, and the Nasdaq Composite declined 2.53%.
The global developments also affected the ITS index family. The ITS World Index (ITSW), which tracks global companies, took the biggest hit, falling more than 4% over the week amid panic-driven sentiment in China. Leading tech giants including Alibaba (BABA, -8.45%), Baidu (BIDU, -8.09%), and JD.com (JD, -6.24%) faced heavy selling pressure. In contrast, the ITS Shariah Index (ITSS), made up primarily of U.S. equities, proved more resilient to Friday’s sell-off, posting weekly losses roughly in line with major U.S. benchmarks (-2.33%).
At the sector level, companies in the consumer cyclical segment were hit hardest, with average weekly losses exceeding 4%. Much of the decline was driven by two of the sector’s biggest players Amazon (AMZN) and Tesla (TSLA). Their shares each slid around 5% on Friday, wiping out a significant portion of their market capitalization.
The energy sector also suffered a sharp decline, with the sell-off sweeping through nearly all oil and gas companies. Average losses reached 3.85% and prices fell by more than 4% over the week.
Overall, Friday’s events were a cold wake-up call for investors, stripping away some of the overconfidence that had lingered in recent weeks. What happens next remains uncertain, but much will likely hinge on President Trump’s next moves.
Market outlook for October 13, 2025
As always, when Donald Trump’s name enters the headlines, the situation quickly becomes uncertain and uneasy. On Friday, his comments sparked a wave of sell-offs across global markets, but by the weekend he seemed to realise he might have gone too far and tried to calm things down. His latest statements – that the situation is under control and that Washington has no intention of “hurting” China – slightly eased market tensions.
Asian markets, particularly in mainland China, reacted more calmly: the Shanghai Composite Index fell just 0.2% by the end of the day. In Hong Kong, however, sentiment remained more heated, with the Hang Seng dropping 1.6% on Monday. Meanwhile, in Europe and in U.S. futures trading, the atmosphere has stabilised, and prices are holding firmly in positive territory. The U.S. market is especially encouraging, with Dow Jones futures up 1% and NASDAQ 100 futures gaining 2%. There is every chance that we will see growth today, making Friday’s sell-off feel like nothing more than a bad dream.
This week is shaping up to be a tense one, with the earnings season about to kick off – traditionally led by reports from the largest U.S. banks. Fresh figures will start coming in tomorrow, October 14, followed by an accelerating stream of corporate results. Beyond the banks, attention will also turn to reports from asset management giant BlackRock (BLK) and pharmaceutical heavyweight Johnson & Johnson (JNJ), both due on Tuesday before the market opens. On Wednesday, after the closing bell, United Airlines (UAL) – one of America’s leading carriers – will publish its results. The airline has a reputation for surprising and pleasing investors, and many are once again pinning their hopes on it. Then, on Thursday before the market opens, the spotlight will fall on the main star of the week – the world’s leading chipmaker, Taiwan Semiconductor Manufacturing (TSM), whose results are widely expected to be outstanding.
On the macroeconomic front, the week will be anything but quiet. First, Federal Reserve Chair Jerome Powell is scheduled to speak on Tuesday – always an event, regardless of what he says. Second, key macro indicators are due later in the week: the Consumer Price Index (CPI) on Wednesday, the Producer Price Index (PPI) on Thursday, and retail sales data. However, it remains uncertain whether these releases will go ahead due to the ongoing U.S. government shutdown, which has paralysed federal agencies. Markets may once again have to operate without crucial guidance.
And of course, investors will keep a close watch on the main source of market turbulence – President Trump. No one, perhaps not even Trump himself, can predict what he’ll say next, so it’s best to stay on guard.
That’s the outlook for the week ahead. As we can see, it’s packed with events that could have a major impact on market sentiment. Let’s stay alert – and hope there won’t be a repeat of Friday’s sell-off.