The Truce That Isn’t: Markets Drift as Trade Reality Sets In

  • Trade Policy
  • November 25, 2025

November 25, 2025

Global capital markets opened Tuesday in a cautious mode, signalling that the initial optimism around the so-called “Busan breakthrough” is beginning to fade. While the headline agreement between President Donald J. Trump and President Xi Jinping, officially described in the White House as a trade and economic deal with China, has averted an immediate trade war, the details are proving harder for investors to digest. U.S. equities such as the S&P 500 and Nasdaq Composite closed in the red on Monday, a weakness flowing into Asian trading where the Nifty 50 and Hang Seng Index are consolidating in narrow ranges.

The root of investor anxiety lies not in the headline agreement but in the fragility of the truce. According to the official White House fact sheet, the U.S. will maintain its 10 % “reciprocal” tariff on Chinese goods and suspend further tariff escalation until November 10, 2026, in return for China suspending the global rollout of its October 9 rare-earth and critical-minerals export controls and issuing general licences for exports of rare earths, gallium, germanium, antimony, and graphite. However, the Chinese side has confirmed only some aspects (e.g., suspension of the October 9 controls for one year) and not all of the general-licensing claims, raising questions about implementation. That gap between U.S. and Chinese interpretation underscores the limited nature of the “deal”.

In technology markets, the uncertainty is especially acute. The high-flying sector has been in suspended animation because key supply-chain dependencies remain subject to geopolitical risk. For example, while Chinese export curbs on rare-earth and dual-use materials have been paused, the pause is time-limited and not a full rollback. The echoes of volatility in companies such as Nvidia Corporation point to a fault line in the “AI trade” where geopolitics could abruptly cut off critical inputs.

On the industrial side, there are flashes of resilience. Keysight Technologies (KEYS) delivered a strong Q4 result, reporting $1.91 per share, which suggests demand for electronic-design and test infrastructure remains firm even as software valuations soften. This divergence, a bifurcation between speculative tech and the “picks and shovels” hardware reality, is likely to shape market behaviour through the end of the quarter.

Meanwhil,e the macro-backdrop remains blurred by a “data fog” caused by the recent prolonged U.S. federal government shutdown, which delayed inflation and employment prints. With incomplete information, the Federal Reserve Board is widely expected to cut rates in December, yet conviction among investors is low. The 10-year U.S. Treasury yield remains stubbornly elevated, implying the bond market is still pricing in “higher for longer” inflation risk that equity analysts may not have fully internalised.

The Bottom Line: The so-called “Trump Put” appears to have been replaced by a “Trade Truce”, but the floor it provides is thin. With the monthly derivatives expiry looming, heightened volatility is probable. Smart capital appears to be rotating out of speculative tech and into sectors explicitly favoured by the new trade framework, namely U.S. agriculture and industrial components, while waiting for the Fed to clear the air next month.

References

The White House. (2025, November 1). Fact Sheet: President Donald J. Trump Strikes Deal on Economic and Trade Relations with China. https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-strikes-deal-on-economic-and-trade-relations-with-china/

Times of India. (2025, November 24). Stock market today: Nifty50 ends below 26,000; BSE Sensex down over 330 points. https://timesofindia.indiatimes.com/business/india-business/stock-market-today-nifty50-bse-sensex-november-24-2025-dalal-street-indian-equities-global-markets-donald-trump-tariffs-india-us-trade-deal/articleshow/125530898.cms

Quiver Quantitative. (2025, November 24). KEYSIGHT TECHNOLOGIES ($KEYS) Q4 2025 Earnings Results. https://www.quiverquant.com/news/KEYSIGHT+TECHNOLOGIES+%28%24KEYS%29+Q4+2025+Earnings+Results

Goodreturns. (2025, November 25). Stock Market Outlook Today, 25 November 2025: Sensex, Nifty Likely to Consolidate Ahead of Monthly Expiry. https://www.goodreturns.in/news/stock-market-prediction-today-25-november-2025-sensex-nifty-likely-to-consolidate-ahead-of-monthly-e-1471867.html

China Briefing. (2025, November 10). Trump-Xi Meeting: US and China Agree to Tariff, Rare Earth Concessions. https://www.china-briefing.com/news/trump-xi-meeting-outcomes-and-implications/

Other News and Insights

The Reshaping of WTO
  • Trade Policy
  • November 10, 2025

The Reshaping of WTO: Challenges and Opportunities for 2026

Our latest predictions on major currency pairs and practical steps businesses can take to mitigate exchange rate risk exposure.

H200
  • Macroeconomics, Market Insights
  • December 23, 2025

The “Golden” Christmas: Markets Ignore Trade War 2.0 as Precious Metals Go Parabolic

Date: December 23, 2025

Wall Street has officially entered the “twilight zone” of the 2025 trading year. As liquidity thins ahead of the Christmas holiday, the S&P 500 and Nasdaq are pushing higher into Tuesday’s session, defying the typical late-December slowdown. But the calm on equity screens contrasts sharply with the urgency building in commodities. Gold futures have vaulted past a major psychological threshold, trading above $4,400 an ounce for the first time, while silver prices are approaching the $70 level.

This unusual alignment, strength in both risk assets (stocks) and traditional risk hedges (gold), suggests investors are simultaneously embracing the Federal Reserve’s recent rate cut to 3.75% and guarding against its longer-term consequences. With the 10-year Treasury yield holding near 4.17%, the speed and scale of the precious metals rally points to growing concern that easier financial conditions could revive inflation pressures as early as Q1 2026.

Geopolitics is adding another layer of uncertainty. Earlier optimism around a temporary “trade truce” is beginning to fade, though the fault lines are shifting. While U.S.–China negotiations remain in a holding pattern, Beijing has escalated trade pressure on Europe. China’s Ministry of Commerce announced that anti-dumping tariffs of between 21.9% and 42.7% on EU dairy imports have taken effect, directly impacting producers in the Netherlands and Denmark, including FrieslandCampina and Arla. The move underscores China’s willingness to use targeted trade measures amid broader strategic tensions.

In contrast, sentiment in the technology sector remains resilient. Reports indicate Nvidia (NVDA) is preparing a compliant version of its H200 AI chip that could allow shipments to China to resume by mid-February. Even with performance restrictions, the prospect of renewed access to Chinese demand has lifted semiconductor stocks, helping offset concerns tied to widening global trade frictions.

Meanwhile, consolidation pressures are intensifying in the media industry as competition shifts from subscriber growth to scale. Paramount Global (PARA) is reported to have made a roughly $40 billion hostile bid for Warner Bros. Discovery (WBD), potentially complicating separate takeover speculation involving Netflix. The aggressive move reflects urgency among legacy media firms ahead of a tougher regulatory environment expected in 2026, which could narrow the window for large-scale mergers.

The “Santa Rally” appears intact, but it is unfolding alongside a sharp reassessment of monetary risk. When gold rises more than 1% in a single session without a clear crisis trigger, it signals heightened sensitivity to central bank policy and currency stability. Equity gains may continue into year-end, but investors should watch the dollar index (DXY) closely. A decisive break lower could indicate that the inflation-sensitive trades of 2026 are already coming into focus.

References

trump
  • Trade Policy
  • November 19, 2025

The New Trade Paradox: ASEAN Navigates Strategic Alignment Amidst Tariff Demands

November 19, 2025

The economic relationship between the United States and the Association of Southeast Asian Nations (ASEAN) is increasingly shaped by the tension between Washington’s push for deeper strategic cooperation and ASEAN’s emphasis on multilateral economic integration. Following the ASEAN Summit, the U.S. move toward more reciprocal trade arrangements has sought to influence regional supply chains by linking preferential market access with broader strategic commitments (Brownstein, 2025). Under this approach, ASEAN members that have formal agreements, such as Malaysia and Cambodia, and those participating through frameworks, such as Vietnam and Thailand, remain within the U.S. reciprocal tariff regime but may receive targeted exemptions. This has created a differentiated tariff landscape influenced by each country’s alignment track record rather than purely economic considerations (Dezan Shira & Associates, 2025).

This tiered structure places ASEAN in a difficult position despite its demonstrated economic resilience. While the United States is ASEAN’s fourth-largest trading partner, the region’s trade with China is more than twice that volume, underscoring Beijing’s central role in regional production networks (Heinrich Böll Foundation, 2025). U.S. tariff measures also aim to curb China’s regional influence by imposing higher duties on goods suspected of being rerouted or transshipped through ASEAN economies, prompting member states to strengthen their customs enforcement to address U.S. concerns over duty circumvention (Bangkok Post, 2025). These compliance requirements, however, clash with ASEAN’s heavy dependence on Chinese inputs and capital, generating both political sensitivity and operational challenges for states trying to maintain strategic neutrality (Bangkok Post, 2025).

At the same time, China is expanding its own regional economic footprint by advancing multilateral initiatives such as the upgraded ASEAN–China Free Trade Area (ACFTA 3.0). The new framework emphasizes cooperation in digital trade, supply chain resilience, and standards harmonization, positioning China as a more stable long-term economic partner and offering ASEAN an institutional buffer against external policy volatility (ThinkChina, 2025). The broader geopolitical signal is clear: while ASEAN leaders still describe Washington as an important strategic counterweight, the more predictable and institution-driven nature of China’s economic engagement may encourage a gradual structural tilt toward Beijing if U.S. trade policy continues to shift toward short-term, transactional arrangements (East Asia Forum, 2025).

References

Bangkok Post. (2025). Southeast Asia squeezed by superpowers. https://www.bangkokpost.com/opinion/opinion/3137651/southeast-asia-squeezed-by-superpowers

Brownstein. (2025). President Trump Reaches Trade Agreements with Southeast Asian Countries. https://www.bhfs.com/insight/president-trump-reaches-trade-agreements-with-southeast-asian-countries/

Dezan Shira & Associates. (2025). U.S. Tariffs in Asia 2025 – A Regional Investment Map. https://www.aseanbriefing.com/news/u-s-tariffs-in-asia-2025-a-regional-investment-map/

East Asia Forum. (2025). Trump tariffs tilt Southeast Asia towards China. https://eastasiaforum.org/2025/09/23/trump-tariffs-tilt-southeast-asia-towards-china/

Heinrich Böll Foundation. (2025). In A Turbulent World, ASEAN Needs to Do Its Internal Homework. https://th.boell.org/en/2025/07/18/turbulent-world-asean-needs-do-its-internal-homework

ThinkChina. (2025). ACFTA 3.0: The China-ASEAN deal that could shake US influence? https://www.thinkchina.sg/economy/acfta-3-0-china-asean-deal-could-shake-us-influence

 

Carbon Border
  • Trade Policy
  • November 19, 2025

Beyond Compliance: Strategic Adaptation to the Era of Eco-Protectionism and Carbon Border Adjustments

The contemporary international trade regime is witnessing a fundamental reconfiguration, characterized by the convergence of aggressive environmental policy and protectionist trade measures. This phenomenon, increasingly termed “eco-protectionism,” represents a departure from the era of uninhibited globalization toward a system where market access is contingent upon environmental performance (UNCTAD, 2025). For global organizations, this shift signals that sustainability governance can no longer be siloed within corporate social responsibility departments; rather, it has become a central pillar of trade compliance and competitive strategy.

As the transitional phase of the European Union’s Carbon Border Adjustment Mechanism (CBAM) concludes in late 2025, the distinction between sustainability compliance and financial viability is rapidly eroding. Commencing in 2026, the shift from mere data reporting to mandatory financial liability for embedded carbon emissions will fundamentally alter the cost structures of imported goods, particularly in energy-intensive sectors such as steel, aluminum, and fertilizers (European Commission, 2025). Consequently, firms that fail to accurately account for and reduce the carbon intensity of their supply chains face the dual risk of prohibitive tariffs and exclusion from the Single Market.

Beyond the immediate fiscal implications of European regulations, the rise of eco-protectionism is fostering a fragmented global market characterized by “green friend-shoring.” Recent economic analyses suggest that multinational enterprises are increasingly restructuring supply networks to prioritize jurisdictions with low-carbon energy grids and regulatory alignment, thereby mitigating the risk of future carbon tariffs from other major economies like the United States or China (White & Case, 2025). This geopolitical fragmentation compels organizations to assess geopolitical risk not merely through the lens of political stability, but through the metric of carbon diplomacy and environmental reciprocity.

To navigate this volatile landscape, multinational enterprises must transition from passive reporting to active supply chain decarbonization. Strategic resilience in 2026 and beyond requires the implementation of deep-tier supply chain auditing to capture Scope 3 emissions data with the same rigor applied to financial accounting (Dawgen Global, 2025). Ultimately, in an era defined by eco-protectionism, the ability to demonstrate a low-carbon footprint is no longer a reputational asset, but a prerequisite for maintaining global market access.

References

Dawgen Global. (2025). Emerging trends in global trade and investment for 2025 and beyond. https://www.dawgen.global/emerging-trends-in-global-trade-and-investment-for-2025-and-beyond/

European Commission. (2025). Carbon Border Adjustment Mechanism: Transition phase and definitive regime. Taxation and Customs Union. https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en

UNCTAD. (2025). Global trade update: Resilience under pressure. United Nations Conference on Trade and Development. https://unctad.org/publication/global-trade-update-october-2025-global-trade-remains-strong-despite-policy-changes-and

White & Case. (2025). Overview of foreign trade 2025. Insight Alert. https://www.whitecase.com/insight-alert/overview-foreign-trade-2025

Navigating New Export Control Regimes in Technology
  • Regulatory
  • November 10, 2025

Navigating New Export Control Regimes in Technology

A guide to the rapidly evolving landscape of international technology transfer regulations and compliance requirements.

Trump-Tariffs-Article-port-public-domain
  • Trade Policy
  • November 25, 2025

The Truce That Isn’t: Markets Drift as Trade Reality Sets In

KODAK Digital Still Camera
  • Macroeconomics, Market Insights, Regulatory
  • January 3, 2026

The Morning After: Markets Face a “Crude” Reality Check to Start 2026

Date: January 3, 2026

If the final trading days of 2025 felt like a champagne toast to the long-awaited “Soft Landing,” the opening sessions of 2026 are beginning to resemble the morning after. As global markets find their footing in the first full trading week of the new year, investor sentiment has turned notably more cautious—driven less by equity exuberance and more by a sharp repricing in the energy complex.

Brent crude has slid below $61 a barrel, marking its lowest sustained level since the pandemic-era demand shock of 2020. While the macro backdrop today is fundamentally different, the price action reinforces a warning the International Energy Agency has echoed for much of the past year: global oil supply growth is once again running ahead of demand. The issue is not a collapse in consumption, but rather an abundance of barrels entering the market simultaneously.

The emerging “Great Glut” of 2026 is no longer theoretical. Even as OPEC+ has signaled a continued pause on further production increases, output growth from non-OPEC producers, most notably the United States, Guyana, and Brazil, has proven sufficient to overwhelm incremental demand growth. According to recent U.S. Energy Information Administration projections, this imbalance could persist well into the first half of the year. For consumers, the implication is broadly positive, with U.S. gasoline prices projected to drift toward the $3.00-per-gallon range this quarter, assuming crude prices remain under pressure. For equity markets, however, the story is more complicated.

While energy represents a relatively modest share of the S&P 500 by weight, the sector still plays an outsized role in earnings momentum and inflation expectations. A sustained downturn in oil prices threatens to weigh on aggregate earnings growth and dampen index-level performance at a time when valuations elsewhere remain elevated. Even the continued dominance of the so-called “Magnificent Seven” may not be sufficient to fully offset renewed weakness in cyclically sensitive sectors.

That tension is already evident in the growing divergence among Wall Street’s largest forecasting houses. Goldman Sachs reiterated a bullish outlook this week, maintaining its call for the S&P 500 to reach 7,600 by year-end, citing AI-driven productivity gains and the potential tailwind from corporate tax relief. Morgan Stanley, by contrast, has struck a more cautious tone, warning that the artificial intelligence trade is entering a “show me” phase. As capital expenditures rise, investors are increasingly demanding near-term cash flow and margin expansion, not just long-duration growth narratives. The gap between these views suggests that 2026 may reward selectivity rather than broad exposure, with sharp sector rotations replacing the rising-tide dynamics of recent years.

Geopolitics adds another layer of complexity. Control Risks’ newly released RiskMap 2026 identifies “Transactionalism” as the defining risk for global business, underscoring the erosion of predictable, rules-based international cooperation. Long-standing alliances are increasingly giving way to ad hoc, deal-driven arrangements, a trend visible in the fragile U.S.–China détente, which continues to show signs of strain. For multinational firms and supply chain managers, this environment implies greater volatility, as tariffs, export controls, and regulatory sovereignty measures can emerge with little warning.

The Bottom Line: The traditional “January Effect” is colliding with a wall of supply, both in physical commodities and in financial markets. Lower energy prices should ultimately support consumer spending and help anchor inflation expectations, but the near-term impact on energy earnings and market sentiment is proving destabilizing. For now, defensive positioning appears prudent as investors watch whether oil can sustainably hold the $60 level. A decisive break lower would reinforce broader disinflationary signals and could, over time, force the Federal Reserve to reassess the durability of its current policy pause.

References

Goldman Sachs. (2025). 2026 Outlooks: Some Like It Hot. (Retrieved 2026, January 3).
https://www.goldmansachs.com/insights/outlooks/2026-outlooks

U.S. Energy Information Administration (EIA). (2025, December 9). Short-Term Energy Outlook: Global Oil Prices Forecast.
https://www.eia.gov/outlooks/steo/

Control Risks. (2025). RiskMap 2026: The New Rules – No Rules World.
https://www.controlrisks.com/riskmap/top-risks/the-new-rules-no-rules-world

Investing.com. (2025, December 31). Goldman Sachs forecasts 11% S&P 500 rise in 2026 amid economic growth.
https://www.investing.com/news/analyst-ratings/goldman-sachs-forecasts-11-sp-500-rise-in-2026-amid-economic-growth-93CH-4426751

Rigzone. (2026, January 2). Oil Fluctuates as Traders Weigh Surplus, Geopolitical Risks.
https://www.rigzone.com/news/wire/oil_fluctuates_as_traders_weigh_surplus_geopolitical_risks-02-jan-2026-182677-article/

IMG_0084
  • Market Insights
  • February 19, 2026

Market Dynamics: A Tale of Two Sectors

February 2026 recruitment data from Wave shows a strong early-quarter uptick in activity, with job postings up about 39 % compared with late 2025, alongside increased applications and placements — a sign of renewed hiring momentum in several markets.

Despite this overall surge, imbalances persist across industries. Consistent with broader labour-market reports, health-care hiring continues to be a standout driver of job growth, reflecting chronic staffing shortages and rising demand, while other sectors are expanding more slowly.

Recruiters at firms such as Van Der Consulting face evolving challenges around verifying candidate skills for highly technical and fast-changing roles, particularly in AI and emerging tech areas. According to LinkedIn’s January 2026 Labor Market Report, the global job market remains sluggish in some regions with job seekers outnumbering openings and employers placing greater emphasis on skill-based hiring — especially where advanced technical skills intersect with human-centric strengths like communication and problem-solving.

Industry research also supports the idea that workers with AI-related skills continue to command a substantial wage premium. The PwC 2025 Global AI Jobs Barometer found that jobs requiring AI capabilities are associated with an average wage premium of around 56 % compared with similar roles without those skills, and that demand for AI-proficient talent continues to outpace other job growth.

Overall, the labour market in early 2026 is marked by imbalances between sectors, ongoing shortages of specialised talent, and growing returns for workers who combine technical AI skills with strong interpersonal and problem-solving abilities

Oracle Corporation Headquarters - July 2019 (8327)
  • Macroeconomics, Market Insights
  • December 18, 2025

The “Santa Pause”: AI Repricing and Policy Uncertainty Temper Year-End Optimism

December 18, 2025

As the final trading days of 2025 approach, the traditionally anticipated “Santa Claus Rally” has lost momentum amid growing investor caution. While the S&P 500 remains near record levels, the strong upward impulse seen in November has moderated. A combination of a volatile labor market report, mixed signals from the Federal Reserve, and a rotation away from high-valuation growth stocks has made investors more reluctant to increase exposure heading into the holiday period.

A central theme this week has been a reassessment of the so-called “AI trade.” Several major semiconductor and enterprise software stocks experienced renewed selling pressure on Wednesday, contributing to a 1.8% decline in the Nasdaq, its weakest session in several weeks. Investor sentiment appears to be shifting as market participants scrutinize whether current capital expenditure commitments can translate into near-term revenue growth. Oracle shares fell more than 5% following reports that financing for a large-scale AI data center project had been delayed, highlighting the increasing focus on funding discipline and return on investment. This shift in sentiment weighed on the broader sector, including Nvidia and Broadcom, reinforcing the view that future valuations will depend more heavily on realized cash flows rather than projected capacity expansion.

On the macroeconomic side, the Federal Reserve’s transition toward a more accommodative stance has been less straightforward than markets initially anticipated. The Fed implemented a 25-basis-point rate cut last week, lowering the target range to 3.50%–3.75%, but the response across asset classes has been muted. Long-term interest rates, in particular, have remained elevated, with the 10-year Treasury yield holding above 4.15%. This divergence suggests that bond investors remain cautious about inflation persistence and fiscal risks, even as the Fed seeks to support economic activity amid a labor market showing signs of gradual softening, with unemployment edging up to 4.4%.

Geopolitical considerations are also contributing to the cautious tone. While the “Kuala Lumpur Truce” reduced the immediate risk of renewed tariff escalation between the U.S. and China, broader strategic tensions persist. Recent reporting has drawn attention to China’s expanding role in maritime security operations in parts of Africa and the Indian Ocean, developments that could have longer-term implications for trade routes and regional stability. At the same time, China’s economy appears to have exceeded earlier 2025 growth expectations, with nominal GDP approaching an estimated $19.8 trillion, supported by strong exports in high-tech manufacturing sectors such as electric vehicles, robotics, and renewable energy technologies.


Markets appear to be undergoing a period of cautious reallocation rather than outright risk aversion. Investor capital is rotating away from the most speculative segments of the AI complex and toward assets more closely tied to current economic activity, including energy, where oil prices rose modestly after the U.S. administration moved to restrict Venezuelan tanker operations. With key inflation data due shortly, volatility is likely to remain elevated through year-end. Much of the easy gains of 2025 may already be realized, suggesting that market performance in 2026 will depend more on earnings resilience and margin discipline than on multiple expansion alone.

References