Hi, I’m Noah Kaplan, Associate Portfolio Manager at Morningstar Investment Management. Welcome to the Morningstar Market Minute—our weekly look at key market movements, economic themes, and what they mean for portfolios. Each Friday, we break down what happened, how we see it, and where we’re positioned.

This week, attention turned to Washington and Beijing as trade tensions flared once again. China imposed new export controls on critical rare earth minerals, prompting President Trump to retaliate with one of his famous posts on the platform X, threatening 100% tariffs on all Chinese imports. US equity markets, no less than 1 day after making all-time highs, sold off sharply on the announcement before rebounding this week as U.S. officials weighed in to temper an escalation.

Despite the volatility, as the US headed into reporting season, U.S. bank earnings came in stronger than expected with solid results from Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC), up approximately 6% and 11% respectively this week. Bank results certainly helped to lift sentiment and pushing the S&P 500 modestly higher while some of the magnificent 7 stocks remain below the pre announcement highs. European markets also found footing, with strong luxury goods sales bringing encouraging news for our holdings in LVMH (XPAR:MC), Burberry (LSE:BRBY) and Kering (XPAR:KER) while European defense companies, which have been a popular theme this year, performed poorly over the week.

In global rates, central banks walked a careful line. The U.S. Federal Reserve showed dovish signs, with officials signalling openness to further rate cuts as the government shutdown, now in its third week, delayed key data releases. Meanwhile, at home, markets are pricing in a higher chance of a rate cut by the end of the year compared to this time last week. In Currency markets, early in the week, political leadership uncertainty in France and Japan weighed initially on the Euro and Yen respectively. The surprise tariff announcement and resulting volatility later reversed the course and saw both strengthen against the Australian dollar during the week.

In other headlines, the IMF’s annual meeting also grabbed attention with officials warning global debt levels are on an unsustainable path—projected to exceed 100% of global GDP by 2029. These fiscal concerns have joined a growing list of factors that have propelled gold prices up over 50% year to date to all-time highs in Australian dollar terms.

That’s all for this week. Thanks for joining us—we’ll see you next Friday for the next Market Minute.