Murphy's Market Minute | October 10, 2025

Stock markets reached new all-time highs earlier this week but declined sharply today following China’s announcement of new restrictions on the export of rare earth materials and related technologies. In response, President Trump threatened a significant increase in tariffs on Chinese products. Currently, tariffs on Chinese imports stand at 30% under the existing trade truce between the U.S. and China. This sudden escalation in trade tensions sent stocks lower this morning, pulling major indices back from their record highs. Meanwhile, the government shutdown continues, delaying key economic reports. Next week’s inflation data is scheduled for release—assuming the shutdown does not persist. Outside of official reports, consumer credit balances—which measure total outstanding credit card debt—declined slightly in August. This marks a continued downtrend since October 2024, indicating modestly reduced consumer borrowing and spending. While that may appear concerning, the pullback remains mild compared to major downturns seen earlier in the century and can be viewed as a healthy normalization rather than a warning sign. The odds of a U.S. recession remain relatively low, with Kalshi markets pricing only a 33% probability of recession by 2027. Earnings season for the third quarter is now underway, with major technology companies set to report in the coming weeks. Forecasts point to another strong round of corporate results. With easing monetary policy and solid earnings expectations, the broader market outlook remains resilient despite renewed geopolitical tensions.