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Friday, Oct 24, 2025

Conflicting Trade Signals Rocked Markets With Three Hours of Chaos

Conflicting Trade Signals Rocked Markets With Three Hours of Chaos

Even for investors hardened by more than a year of trade-war headlines, it’s been a chaotic few hours.Conflicting signals on the prospects for a deal between the U.S. and China sent S&P 500 futures on one of their wildest rides in recent memory, triggering four 1%-plus swings in contracts
Shortly after U.S. stock markets closed with gains amid optimism about trade talks on Wednesday, S&P 500 futures began tanking on a South China Morning Post report that deputy-level discussions had made “no progress” and that principal Chinese negotiators might cut short their stay.

The market rallied on separate reports that top Chinese envoy Liu He would remain in Washington through Friday, then turned lower on another wave of selling. The next rebound came on news that the White House may roll out a previously agreed currency pact with China as part of a deal that could also suspend a planned tariff increase next week.

By 8:18 a.m. in London, S&P 500 futures were almost back to where they started. The yen, oil, gold and Treasury futures saw similar fluctuations.

Read more: Treasuries Trading Electrified in Asia by Trade Confusion

Investor nervousness has increased against a backdrop of deteriorating economic data and escalating tensions between the U.S. in China.

On Monday, the Trump administration moved to blacklist Chinese tech firms including video-surveillance company Hangzhou Hikvision Digital Technology Co., alleging that they were complicit in human-rights violations in Xinjiang. U.S. officials are also reportedly moving ahead with discussions around possible restrictions on portfolio flows into China. A fight over free speech between China and the NBA, triggered by a tweet backing Hong Kong’s protesters, has added to the tense mood.

“Overall the market is pretty on the edge as we’ve seen bigger negative reactions toward trade news,” said Mingze Wu, a foreign-exchange trader at INTL FCStone Global Payments in Singapore.

Some investors have responded by adding hedges, helping push the Cboe Volatility Index, or VIX, steadily higher since late September. October futures on the index rose 2.3% on Thursday.

“The difficulty in predicting the final outcome of the trade dispute poses a challenge for investors,” Mark Haefele, global chief investment officer at UBS Wealth Management, wrote in a note on Wednesday. “Not even the negotiators themselves can yet be confident of the final result.”

(Updates markets in eighth and 12th paragraphs.)

--With assistance from Jenny Leonard, Ruth Carson and Stephen Spratt.

To contact the reporter on this story: Joanna Ossinger in Singapore at jossinger@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Michael Patterson
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