Markets ended the week lower on renewed trade tensions between the US and China. Friday saw the S&P 500 fall 2.7%, it’s the largest one-day decline since April, following a surprise announcement by President Trump that he intends to increase tariffs on Chinese goods by 100% “over and above” any existing tariffs, beginning November 1. If imposed, tariffs on Chinese imports would rise to 130%. The move came in response to China placing new export controls on rare earth minerals critical to the manufacturing of advanced computer chips and batteries used in a number of industries including tech, autos, and defense. With stock market valuations currently at elevated levels, markets could experience heightened volatility, unless the two sides move quickly to diffuse the current uptick in tensions.
After two years of fighting, Hamas and Israel accepted a peace agreement designed to bring an end to the current conflict. The first phase of the deal calls for Hamas to release all living and deceased Israeli hostages. In turn, Israel will release nearly 2,000 Palestinian prisoners and allow aid trucks to enter the Gaza Strip. Ensuing phases of the 20-point peace agreement call for the disarmament of Hamas, an international coalition to oversee the rebuilding of the Gaza Strip, and an eventual two-state solution, one which does not include Hamas. Whether these objectives will ultimately be achieved remains to be seen but the current ceasefire between the two sides is a welcomed first step to ending the direct fighting between Israel and Hamas and defusing broader tensions within the Middle East.
