China and the United States appear to be heading back into a trade war, a development that sent the American markets tumbling on Friday. European markets also closed in the red, and Asian markets followed suit this morning.
China has once again imposed strict controls on the export of rare earth elements. This announcement on Thursday provoked a sharp reaction from US President Donald Trump, who retaliated by restricting the export of advanced computer processors and technology to China. He further declared that, starting November 1, imports from China would face a 100% tariff. Trump also announced that he would cancel plans to meet Chinese President Xi Jinping during the Asia-Pacific summit in South Korea later this month. These developments led to a sharp fall in equities, cryptocurrencies, and the dollar, while gold surged and crude oil slipped.
Trump later softened his stance, saying discussions with Xi could still happen and that the two nations would resolve their issues. In a social media post yesterday, he expressed confidence in finding a solution. Goldman Sachs analysts said China’s renewed assertiveness appeared to be aimed at forcing trade concessions. Following Trump’s conciliatory post, US futures rebounded more than 1%, although Asian markets continued to trade lower. Crude oil and cryptocurrencies recovered slightly.
Analysts fear the trade war tensions will dampen sentiment in Indian markets as well. US Ambassador-designate Sergio Gore has arrived in New Delhi for discussions, while Paul Kapoor, a nuclear security expert of Indian origin and a known Pakistan critic, has been appointed to oversee South and Central Asian affairs at the US State Department — developments seen as positive for improving India–US ties. India may also benefit if the punitive tariffs are eased.
This week, several major Indian companies will announce quarterly results, and key economic indicators such as retail and wholesale inflation and trade data will also be released. However, not all numbers are expected to be favourable.
In the derivatives segment, Gift Nifty closed Friday night at 25,222.00 and rose to 25,350 this morning, suggesting Indian markets may open with significant losses.
Trump’s declaration of 100% tariffs on China rattled European markets, which ended Friday about 1.5% lower across major indices. The end of the Gaza conflict also pushed down defence stocks.
At 10:57 am US time on Friday, Trump posted on Truth Social that he would impose 100% additional tariffs on Chinese imports. Within hours, investors on Wall Street lost around $2 trillion. It was the steepest drop since the tariff shock in April. The S&P 500 fell 2.7%, while the Nasdaq, after hitting a record earlier in the day, plunged as much as 4.5% before recovering slightly.
China’s restrictions on rare earth exports hit technology firms hardest — Nvidia fell 5%, AMD 8%, Apple 3%, and Tesla 5%. Major banks were down over 2%, and Levi Strauss shares plummeted 12%. The Dow Jones closed 878.82 points (1.90%) lower at 45,479.60. The S&P 500 shed 182.60 points (2.71%) to finish at 6,552.51, while the Nasdaq Composite dropped 820.20 points (3.56%) to 22,204.43.
Futures markets in the US showed a rebound this morning — Dow up 0.86%, S&P up 1.32%, and Nasdaq up 1.87%. Third-quarter results from major US banks, due tomorrow and Wednesday, are expected to guide market sentiment.
Asian markets, however, remained weak today. Japan is closed for a holiday, South Korea is down 2.35%, Australia 0.60%, China 1.05%, and Hong Kong 1.75%.
On Friday, Indian indices opened flat but ended with strong gains, aided by continued foreign inflows. All sectors except metals, IT, and defence closed higher. Realty, PSU banks, pharma, and healthcare led the rally. Bank Nifty and Smallcap 100 outperformed major benchmarks.
The Nifty rose 103.55 points (0.41%) to close at 25,285.35, while the Sensex gained 328.72 points (0.40%) to end at 82,500.82. Bank Nifty jumped 417.70 points (0.74%) to 56,609.75. The Midcap 100 index advanced 0.46%, and Smallcap 100 climbed 0.74%.
Market breadth was positive, with 2,424 BSE stocks rising against 1,766 declining. On NSE, 1,900 stocks advanced while 1,176 fell. Seventy-seven NSE stocks hit 52-week highs, and 59 touched new lows. Foreign institutional investors bought equities worth ₹459.20 crore, while domestic funds purchased shares worth ₹1,707.83 crore.
Analysts see Nifty support at 25,195 and 24,145, with resistance at 25,320 and 25,370.
HCL Tech, Anand Rathi Wealth, Just Dial, and Den Networks will release their results today. Avenue Supermarts (DMart) reported a 15.5% jump in revenue, 11% increase in operating profit, and 3.85% growth in net income, though margins dipped 29 basis points. Waaree Renewables’ sales surged 47.7% and profits soared 117.4%. Tata Capital shares will list today.
Fears of a renewed US–China trade war pushed gold prices above $4,000 per ounce on Friday. Despite Trump’s reassuring post on Sunday, markets remained nervous. In early Asian trading on Monday, gold climbed 1% to $4,060 before easing to $4,055. The overnight high touched $4,080.
Experts warn that gold may soon face a 5–10% correction, given it has already risen 55% this year without a major pullback. Some predict a rally similar to 1979, when prices soared 130%. Rising geopolitical tensions — from NATO–Russia confrontation to Middle East unrest — have made 2025 a year of economic anxiety. Central banks have been stockpiling gold, purchasing over 1,000 tonnes annually for three consecutive years — triple the decade-long average before that. If conditions worsen, gold could climb even faster.
In Kerala, 22-carat gold dropped to ₹89,680 per sovereign on Friday morning before rebounding to ₹90,720 by afternoon and closing Saturday at a record ₹91,720. International trends indicate prices could rise further today.
Silver prices are also on a record-breaking run, up 71% so far this year. It briefly topped $51 per ounce — surpassing the 2011 peak — before settling at $49.90. Rising demand for electronics and solar applications has tightened supply, and mining data suggest this shortage will persist in the near term. This morning, silver climbed again to $50.78 per ounce, with platinum at $1,627 and palladium and rhodium also gaining.
Industrial metals slumped on Friday amid trade war fears. Copper fell 1.22% to $10,733.80 per tonne, aluminium slipped 0.59% to $2,785.98, tin gained 1.06%, while nickel and lead declined. Zinc edged higher. International rubber prices rose 1.77% to 172.90 cents per kilogram. Cocoa fell 0.18% to $5,837.47 per tonne — the lowest in two years — while coffee gained 0.32% and tea prices remained weak. Palm oil dropped 1.04%.
The dollar index rose 0.5% on Friday to close at 98.98, briefly touching 99.13 this morning before easing to 98.93. The euro strengthened to $1.1609 and the pound to $1.3344. The yen traded at 151.87 per dollar. US Treasury yields fell, with the 10-year note at 4.059%.
The Indian rupee gained 10 paise on Friday to close at 88.68 per dollar, while China’s yuan firmed to 7.11 per dollar.
After falling 4% on Friday, crude oil prices recovered today. Brent rose 1.70% to $63.80 per barrel, WTI hovered near $59.95, and Murban crude traded at $65.02. Natural gas gained 1%.
Trump’s tariff announcement wiped an estimated $2 trillion off global crypto valuations on Friday, with some coins plunging 30%. Bitcoin fell from above $121,000 to $109,900 — a 10% slide — before recovering to $115,300 this morning. Ether dropped 15% to $3,700 and later rebounded to $4,140. Solana crashed 20% to below $178 but climbed back to $197 in early trade.