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Boy, That Escalated Quickly. Tariff Worries Resurface Out of Nowhere.
RiskReversal Recap: Friday, Oct 10th
RiskReversal Media
October 10, 2025
MARKET WRAP
Markets experienced their sharpest bout of downside volatility in months, driven by renewed threats and fresh tariff concerns that reminded investors how unresolved the U.S.–China trade situation remains. Volatility spiked, Oil went below $60, yields fell, and equities closed on their lows of the day, making for an interesting weekend as investors consider the new potential risks into earnings season. On the day: SPX -2.7%, QQQ -3.5% and IWM -3%.
Elsewhere, the US10YY declined to 4.06% on the news. If you recall, that’s the opposite reaction in yields than in April, where the major concern was inflationary. Today’s action suggests fears of accelerating the growth slowdown. To that point, Oil dropped below $59.
DXY dropped back below $99. It had been putting in an impressive rally over the past week. The VIX ripped higher on the initial news, settled in a bit after, but then spiked again into the close, now 21.70, adding to the potential for large earnings moves beginning next week.
Notable Gainers: PEP +3.6%, AZO +3%, ORLY 2.6%, PM +2.5%, SO +2.1% CBOE +1.9%, MCD +1%
Notable Losers: SMCI -8.5%, HOOD -8.2%, XYZ -7.4%, AMD -7.4%, PYPL -7.4%, COIN -7.3%, NVDA -4.5%, MSFT -2.3%, AAPL -3.6%, AMZN -4.9%
After hours: SPY and QQQ closed very poorly and near lows of the day, but both are bid up a tad after hours.
MRKT Call: A very special episode of MRKT Call following today’s breaking tariff news. The reaction across equities, volatility, yields, gold, and oil. Also, another reminder of the risk of Mag7 concentration in major ETFs and indices and then a look ahead to next week’s busy earnings calendar.
MRKT MATRIX: TODAY’S TOP STORIES
Market sell-off on Trump’s China tariff threat (CNBC)
Wall Street’s momentum into next week gets spoiled by tariff concerns, with earnings looming (CNBC)
CPI inflation report will be released by Labor Department, while other data is delayed by shutdown (CNBC)
Americans Are Falling Behind on Their Car Payments (WSJ)
How China could pull ahead in the AI race (FT)
China’s wafer shake-up and the rise of ‘Silicon Desert’(FT)
WHAT’S NEXT?
The Week That Was
Markets saw their biggest bout of downside volatility since April, an instant reminder of the kind of turbulence from earlier in the year that had been largely forgotten. Once again, the trigger was trade war chatter, and fresh threats of new tariffs reigniting concerns that the U.S.–China trade situation remains far from settled. For months, markets have relied on the “TACO trade”. Whether that pattern holds this time remains to be seen. What’s clear is that the shift from complacency to caution was swift. On the week, the SPX was lower by -2.5%, with today’s intraday decline about -3.1% from the morning highs. A total reversal in mood.
Looking Ahead
Implied volatility, which had been quietly drifting higher for the past two weeks from low levels, now provides a fresh test for market stability— as it is now not only pricing renewed trade war risk but it comes right at the onset of earnings season. The big banks will kick things off Tuesday morning, with JPM, C, and WFC among the first to report, followed by more financials and airlines through the week. Later in the week, an overseas check on the semiconductor and equipment space with ASML and TSM.
Meanwhile, the BLS confirmed it will release the September CPI report on October 24th after recalling staff to ensure the data is available for benefits calculations, but it also comes ahead of the FOMC meeting days later. A VIX in the 20’s into earnings season is much different than one at 16, and it now clears the way for much larger moves in a lot of names.
We’ll have a full breakdown of next week’s catalysts and how today’s trade headlines have shifted the market backdrop in Sunday’s email update.
TODAY’S EPISODES
Watch RiskReversal Podcast’s newest episode: MRKT Call In Turmoil: $SPX Falls On Trump's China Comments
A very special episode of MRKT Call following today’s breaking tariff news. The reaction across equities, volatility, yields, gold, and oil. Also, another reminder of the risk of Mag7 concentration in major ETFs and indices and then a look ahead to next week’s busy earnings calendar.
Analysis - SPX, VIX, TLT, AVGO, SMH, TSM, META, AMZN, SOXX, APO, JEF, Oil, Gold
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