Market Recap
On Friday, the S&P 500 was flat closing at 6,114.63, while the NASDAQ was up 0.41% to 20,026.77. The Dow Jones Industrial Average declined 0.37%, ending the session at 44,546.08.
For the week, the S&P 500 gained 1.13%, the NASDAQ rose 1.82%, and the Dow was up 0.34%. Meanwhile, small caps, represented by the Russell 2000, were flat, finishing at 2,279.98. Gold prices surged to a record high of $2,911.30 per ounce, driven by Trump's tariff threats and escalating global trade tensions.
This week was marked by President Donald Trump's announcement of imposing 25% tariffs on steel and aluminum imports, escalating trade tensions with key allies like Canada, the EU, and Mexico. The move was met with strong opposition, with fears of a potential global trade war looming. Trump's push for reciprocal tariffs further raised economic uncertainty, leading to concerns over higher consumer prices and stifled economic growth.
Inflation rose to 3% in January, complicating the Federal Reserve's path forward and dimming hopes for rate cuts. The price surge led to a tumble in U.S. stocks, with traders scaling back expectations for rate cuts and even considering the possibility of a rate hike. The U.S. dollar strengthened as a result of the inflation data, reinforcing expectations of higher interest rates.
China's imposition of export controls on critical minerals like tungsten further added to economic concerns, threatening global supply chains and industries reliant on these materials. The move, in response to U.S. tariffs, raised fears of supply shortages and price surges, highlighting the interconnectedness of global trade dynamics.
President Donald Trump’s recent comments about U.S. Treasury obligations have sparked concerns far beyond his newly announced steel tariffs. During an in-flight press conference, Trump hinted at the possibility of the U.S. walking away from parts of its debt, a move that could have catastrophic consequences for global financial stability. While the administration later downplayed the remarks, the suggestion of a “selective default” rattled economists.
As the week concluded, Trump signed a proclamation implementing reciprocal tariffs, raising economic uncertainty and potentially triggering retaliatory measures from trading partners. The move to "level the playing field" could have far-reaching implications on global markets, with economists and industry leaders warning of adverse effects on consumer prices and economic growth.
Crypto Recap
Bitcoin (BTC) closed at $96,372, marking a 0.27% increase over the past seven days. Ethereum (ETH) ended the week at $2,663, showing a 1.84% rise. XRP experienced a significant surge, closing at $2.74 with a notable 15.14% increase. Solana (SOL) closed at $188.6, down by 4.82% over the week.
This week in crypto, the SEC made significant acknowledgments regarding Grayscale's XRP and Dogecoin ETF filings. The SEC is facing a mid-October deadline to decide on the approval of these ETFs, with the clock starting soon for the agency to review and make a decision within 240 days. This move by the SEC indicates a shift in approach towards crypto-related listings under the current leadership.
Bloomberg ETF analysts have predicted high chances of approval for XRP and Dogecoin ETFs before the end of 2025, with a 65% and 75% likelihood respectively. Additionally, there is a 90% probability of a Litecoin ETF being approved before the end of this year. However, questions remain regarding XRP's security status, with uncertainties surrounding its approval until the SEC's lawsuit against Ripple Labs is fully resolved.
Global Markets
This week, European markets posted strong gains, with the STOXX Europe 600 rising 1.67% to close at 552.41. Germany’s DAX advanced 3.13%, ending the week at 22,513.42, while France’s CAC 40 climbed 2.52% to 8,178.54, and the UK’s FTSE 100 edged up 0.37% to 8,732.46.
The 2025 Munich Security Conference (MSC) marked a potential inflection point in U.S.-Russia relations, as the White House initiated high-level discussions aimed at recalibrating Washington’s strategic posture toward Moscow. Against the backdrop of renewed diplomatic engagement, President Trump’s administration is leveraging the Russia-Ukraine peace negotiations as a vehicle to reintroduce Moscow into the global power architecture—possibly setting conditions for its re-entry into the G8.
Russia’s exclusion from the G8 in 2014, a direct consequence of its annexation of Crimea, was predicated on its strategic imperatives: securing its Black Sea Fleet and maintaining geopolitical leverage in the region. In the decade since, Western sanctions and proxy engagements have shaped a protracted adversarial relationship, effectively driving Moscow into a closer alignment with Beijing. However, shifting power dynamics in Washington—specifically, the declining influence of the neoconservative foreign policy establishment—are creating operational space for a recalibrated approach.
For over a decade, neoconservative policy directives have sustained a framework that inadvertently reinforced Sino-Russian strategic cooperation, driving Moscow and Beijing into deeper economic, military, and technological alignment. President Trump’s calculus is clear: Russia, while a regional disruptor, does not pose the same long-term systemic threat to U.S. global primacy as China. Maintaining simultaneous adversarial postures toward both powers is a strategic overextension—one that ultimately strengthens Beijing at Washington’s expense.
