2025 October Market Outlook: Between Tariffs and Growth — Searching for Stability

Towards the end of September, in an effort to protect American jobs, the Trump administration made surprised changes to immigration visa laws that target foreign talent, particularly those working in the U.S. technology sector. Amongst the heaviest users of this targeted immigration visa scheme include Amazon.com Services LLC, Meta Platforms Inc, Apple Inc and Google LLC. Later that month, the U.S. Immigration Service issued guidance that included exceptions, thus stabilising concerns. However, the labour market outlook remains uncertain with the shutdown of the U.S. government, which began on October 1st. Consequently, data reports such as the official U.S. monthly jobs report and the labour-intensive Consumer Price Index report would likely be delayed amidst the impending mass firing and unpaid furlough of certain segments of federal workers. In China, September data showed low domestic demand, a continued property downturn and the weakest economic growth in a year.

With the ongoing US-China trade war, Chinese regulators have urged against the use of Nvidia chips completely, stating that domestic chips are adequate in delivering comparable computing power. As such, Chinese domestic chipmakers have benefitted from efforts to become self-sufficient, and this move should serve as a catalyst to grow the technology sector.

China tightened exports of rare earth where products that contain certain rare earths or traces of it sourced from China will now require an export license. With a 70% share of global supply, the supply crunch would be felt by the U.S. and Europe. In response, the U.S. imposed a 100% import surtax on Chinese goods effective November 1st, ahead of the 90-day tariff truce that was set to end on November 9th. Despite the trade war uncertainty, Chinese exports rebounded in September from a slump in August, beating estimates and increasing 8.3% year over year while imports grew 7.4%.

The sweep of high tariffs from the U.S. have led China to seek imports from other avenues, such as Brazil and Argentina for soybean, which has caused farmers in the U.S. to scramble for buyers. On the other hand, aggressive price competition among manufacturers in China have led to what has been termed ‘Chinese dumping’, where low prices due to Chinese imports are alarming domestic producers in India, Africa and South-east Asia.

Looking ahead, we remain cautiously optimistic of the global markets. In the U.S., businesses and households are concerned over trade tariffs, changes to immigration laws and the shutdown of the U.S. government. The structural imbalance in China represented by slow domestic growth and heavy reliance on export further weighs on global financial markets and investor confidence. Despite the uncertainty, there were reports of pockets of positive news. Alternative data in the U.S. such as restaurant bookings and theatre box office receipts reflects resilient consumer activity. The number of seated diners was up 9% from last year and domestic box office grossed 13% more than the previous month.