Key Points

• U.S.–China Near Trade Truce: Washington and Beijing outlined a framework pausing new U.S. tariffs and delaying China’s rare earth export curbs, signaling renewed cooperation ahead of the Trump–Xi meeting.
• Nikkei Tops 50,000: Japan’s Nikkei 225 hit a historic high as optimism over U.S.–China trade progress, Wall Street gains, and Fed rate-cut expectations boosted Asian equities.
• India’s Energy Shift: Reliance Industries’ move to halt Russian oil imports under U.S. sanctions could tighten refining margins but strengthen India’s prospects for a new U.S. trade deal.
• China’s Profit Rebound: Industrial profits surged 21.6% in September — the strongest in nearly two years — driven by high-tech manufacturing gains and Beijing’s efforts to curb price competition.

U.S.–China Near Trade Truce Extension as Trump–Xi Prepare to Meet

U.S. and Chinese negotiators outlined a preliminary framework to pause new tariffs and delay Beijing’s rare earth export restrictions ahead of the Trump–Xi meeting scheduled for Oct. 30 at the APEC Summit in South Korea. U.S. Treasury Secretary Scott Bessent said the deal would avert Trump’s threatened 100% tariffs and likely extend the current tariff truce beyond Nov. 10, while China considers a one-year delay in its licensing regime on critical minerals. The framework also includes revived Chinese purchases of U.S. soybeans and a pending TikTok ownership deal, signaling a tentative de-escalation in trade tensions after months of retaliatory measures.

Nikkei Breaks 50,000 as Asia Rallies on U.S.–China Trade Progress

Japan’s Nikkei 225 surged 2.46% to close at a record 50,512.32, crossing the 50,000 milestone for the first time as optimism over U.S.–China trade negotiations lifted sentiment across Asia. The rally was reinforced by expectations that President Trump’s proposed 100% tariffs on Chinese imports are “effectively off the table,” according to U.S. Treasury Secretary Scott Bessent. Gains extended to South Korea’s Kospi, which breached 4,000, and Hong Kong’s Hang Seng Index, up 1.05%. Investor confidence also drew strength from Wall Street’s record close and expectations of a Fed rate cut, as Japan prepares for Trump’s upcoming meeting with Prime Minister Sanae Takaichi.

Reliance’s Shift from Russian Crude Could Reshape India’s Energy and Trade Balance

Reliance Industries, India’s largest private oil refiner, is reportedly halting purchases of Russian crude following fresh U.S. sanctions on Rosneft and Lukoil, which together supply over 600,000 barrels per day to the company. The move could trim Reliance’s refining margins given Russian oil’s $5–6 per barrel discount to Middle Eastern grades, though alternative supplies from West Asia, Brazil, and Guyana remain available. Analysts say the financial hit will be limited, with the Russian crude benefit representing about 2% of Reliance’s projected 2027 EBITDA. The decision, shared by other Indian refiners, strengthens prospects for a U.S.–India trade deal and reduces Washington’s tariff pressure on New Delhi.

China’s Industrial Profits See Strongest Growth Since 2023 Amid Policy Support

China’s industrial profits surged 21.6% year-on-year in September — the fastest pace since November 2023 — as government efforts to curb price wars and stabilize manufacturing margins took effect. The gains extended August’s 20.4% rise and lifted year-to-date profit growth to 3.2%, up from 0.9% in the first eight months. High-tech manufacturing led the rebound with a 26.8% profit increase, offsetting a 29.3% decline in mining. Despite soft consumer prices and ongoing U.S. trade frictions, industrial output grew 6.5% in September, suggesting Beijing’s targeted industrial policies are bolstering profitability even as broader economic momentum remains uneven.

Conclusion

Global markets enter the week buoyed by signs of de-escalation between the U.S. and China, driving optimism across equities and commodities. Japan’s record-breaking Nikkei underscores renewed investor confidence in Asia, while India’s energy realignment and China’s sharp profit rebound suggest shifting trade and industrial dynamics. Yet, behind the optimism lies a cautious recalibration — from policy coordination to supply chain resilience — as investors weigh the implications of upcoming U.S.–China talks and potential rate moves by the Federal Reserve. The balance between diplomatic progress and macroeconomic headwinds will define market sentiment heading into November.

Investment Insights

• Trade Thaw Boosts Risk Appetite: The U.S.–China tariff pause and rare earth deal framework may lift near-term sentiment in global equities, particularly in export-driven Asian markets.
• Japan’s Momentum Play: The Nikkei’s record rally reinforces Japan’s appeal as a cyclical growth and currency-hedge play amid easing inflation and structural reforms.
• Energy Market Repricing: India’s pivot away from Russian crude could tighten regional supply, supporting oil prices and improving U.S.–India trade alignment — favoring select energy exporters.
• China’s Industrial Strength: Surging industrial profits highlight resilience in high-tech manufacturing, suggesting potential opportunities in Chinese automation, materials, and industrial supply chains.

Economic Calendar

Date	Event	Why It Matters
October 29, 2025	Federal Reserve Rate Decision	Markets expect a 25 bp cut amid cooling labor data; outcome will steer credit conditions, bond yields, and equity valuations.
October 30, 2025	Trump–Xi Meeting (APEC, South Korea)	Potential reset in U.S.–China trade tensions with implications for tariffs, rare-earth supply chains, and global growth sentiment.
October 31, 2025	U.S. Personal Income & Spending / Employment Cost Index	Monitors household demand and wage pressures—both critical for the Fed’s inflation outlook and for consumer-sensitive sectors.
November 1, 2025	Deadline for U.S. 100% Tariffs on Chinese Goods	Could trigger a major escalation in the trade war; delay or reversal would relieve pressure on global supply chains and manufacturing equities.