28/10/2025 Daily Reports
U.S. stock futures edged higher early Tuesday, extending Wall Street’s record-breaking momentum from the previous session as traders positioned for a pivotal week featuring Big Tech earnings, a Federal Reserve policy decision, and further updates on U.S.–China trade talks. On Monday, the Dow gained 0.7%, while the S&P 500 and Nasdaq climbed 1.2% and 1.9%, respectively, following news that Washington and Beijing reached a preliminary framework covering rare earth exports, agricultural purchases, and TikTok’s U.S. operations — fueling optimism that a formal deal could be announced when Presidents Trump and Xi meet later this week.
Attention now turns to the Fed’s policy meeting, where officials are widely expected to deliver a 25-basis-point rate cut on Wednesday. Markets will focus on whether Chair Powell signals room for another reduction before year-end amid persistent growth concerns. Corporate headlines are also in focus as Amazon begins its largest round of layoffs to date, while investors await earnings from Apple, Alphabet, Meta, Microsoft, and Amazon — reports that could determine whether the current rally in equities can sustain its pace.
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- In the metals arena, gold dropped below US $4,000/oz amid improving U.S.–China trade sentiment and reduced safe-haven demand, even though structural drivers remain intact. Meanwhile, copper is nearing record highs as supply constraints and demand rebound add support
- The oil market remains broadly steady on crude prices, but the real pressure is building in middle distillates (diesel/gasoil) as recent U.S. sanctions on Russian producers raise concerns over supply.
- Specifically, gasoil crack spreads surged to around US $31 per barrel (up from around US $23 earlier this month) and timespreads for Nov/Dec contracts approached US $20 per ton in backwardation. .
- Russian diesel exports (circa 1 million barrels per day) are identified as at risk due to sanctions; Indian refiners may reduce run rates if they reduce Russian oil imports, further tightening the market.
- While crude oil remains supported by a comfortable supply outlook for now, the refined product segment faces meaningful disruption risks, making diesel markets relatively more volatile than crude.
What’s Next?
- The sanctions may not move crude dramatically yet, but they may be quietly reshaping the landscape for refined products — and that can have knock-on effects across markets.
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- Global equities are exhibiting a risk-on sentiment, driven by dual factors: expectations of U.S. monetary policy and Japanese political developments. The Nikkei index surged, nearing the psychological $150,000 mark, due to strong optimism that LDP leader Sanae Takaichi will implement significant pro-growth fiscal stimulus if she is confirmed as Prime Minister.
- This political stability and stimulus expectation, coupled with a persistently weaker yen, is providing a direct tailwind for Japanese exporters and the overall index.
- U.S. futures are advancing, with mega-cap technology and growth stocks being strongly supported by market expectations of a Federal Reserve rate cut this week.
- The focus is shifting to the Q3 earnings season, with investor attention amplifying volatility for tech heavyweights such as Apple, Alphabet and Meta. Improved US–China trade optimism has also lifted hopes for semiconductor and software demand.
- In Europe, the DAX is supported by a better risk mood, with an improving German Ifo Business Climate Index signalling a potential cyclical upswing. Defence and industrial stocks are performing well, benefiting from market pricing of increased European defence spending. The ECB’s likely decision to keep interest rates on hold this week means the DAX remains sensitive to global growth signals and any unexpected movements in the euro.
