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Traders Cheer as Tariffs and Fed Cuts Take Center Stage

USAMonday, October 20, 2025
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U. S. Trade Policy and Interest Rate Cuts

  • Trade Policy Shift: Traders anticipate a potential shift in U. S. trade policy.
  • Tariff Battle: Investors are happy at the idea that President Trump might lose his tariff battle.
  • Supreme Court Ruling: If the Supreme Court rules Trump's tariffs illegal, it could boost stock markets.
  • Interest Rate Cut: Investors are confident the Federal Reserve will continue its interest rate-cutting program.

Japan's Political Coalition Boosts Market

  • Nikkei 225 Surge: The Nikkei 225 index surged by 3. 37%.
  • Political Coalition: A new political coalition formed, paving the way for Sanae Takaichi to become Japan's first female prime minister.
  • Investor Confidence: This political development has boosted investor confidence in Japan's market.

China's Resilient Economy

  • GDP Growth: China's economy showed resilience with a GDP growth of 4. 8% in the third quarter.
  • CSI 300 Index: The CSI 300 index rose by 0. 53%.
  • Tariff Threats: Investors believe China is not badly affected by Trump's tariff threats.
  • Rare Earth Minerals: U. S. dependence on China's rare earth minerals makes tariffs unlikely.
  • Tariff Probability: Chances of tariffs by November are now just 7%, according to Polymarket.

European Markets and Fed Speculations

  • Stoxx 600 Index: The Stoxx 600 index was up by 0. 63%.
  • FTSE 100 Index: The U. K. 's FTSE 100 index rose by 0. 36%.
  • CPI Data: The upcoming release of the Consumer Price Index (CPI) data for September is expected to support a 0. 25% rate cut by the Fed next week.
  • December Rate Cut Speculations: Some investors speculate about a larger 0. 50% cut in December, although this seems less likely.
consumer price index cpi datafederal reservecsieuropechinajapanpresident

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