The stock market put on quite a show this week. Up, down, then up again—a financial roller coaster powered by presidential tweets and diplomatic posturing that left investors reaching for motion sickness bags.
After last week's stomach-churning drop, the S&P 500 rebounded with a respectable 1.7% gain, settling at 6,664.01. That's welcome news for anyone who watched their portfolio shrink the previous week. But step back and look at the monthly chart, and you'll see something almost comical: a perfect zigzag pattern over four weeks. Up, down, up, down. The market's equivalent of a shrug.
I've covered financial markets for years, and this kind of indecision usually signals one thing—nobody knows what the hell is coming next.
The Trump-Xi Negotiation Dance
At the heart of this week's market gyrations? The upcoming Trump-Xi meeting, scheduled for what feels like forever from now but is actually just two weeks away. Both leaders are playing a high-stakes version of chicken, each trying to establish leverage without sending markets into free fall.
Monday kicked off with Trump's sudden reassurance that things with China "will all be fine"—a dramatic pivot from his previous threats. Scott Bessent, the Treasury Secretary-in-waiting, piled on with soothing words about "good" relations between the economic superpowers.
The market, bless its desperate heart, jumped 1.5%. Nothing like a vague platitude to move billions of dollars, right?
But wait! By Tuesday, Beijing had countered that they would "fight to the end" in any trade conflict. (Has anyone in diplomatic history ever claimed they'd fight to the middle? Just wondering.) Markets predictably dipped.
And then... well, you know how this goes. Wednesday brought renewed optimism. Thursday saw Trump declaring "we're in a trade war with China now." Friday featured musings about moving deadlines around "if I wanted."
Look, if you're keeping track of all this, you deserve a medal—or maybe therapy.
Gold's Glittering Run
While equity traders were getting whiplash, gold bugs were having the time of their lives. The yellow metal hit new all-time highs in 11 of the past 13 trading days, briefly touching $4,380 before pulling back about 2% to end the week.
Silver—always the more dramatic sibling—touched $52.5, continuing its wild upward trajectory.
I spoke with several metals traders Wednesday who confirmed what we all suspected: this isn't just inflation hedging anymore. "It's fear, plain and simple," one veteran trader told me. "Government shutdown, trade wars, election uncertainty... people want something tangible."
Having covered precious metals since the last major bull run, I can tell you this feels different. Back then, it was primarily an inflation story. Now? It's about everything.
The Shutdown Nobody's Talking About (Except Everyone Is)
Meanwhile, the government remains stubbornly closed. How many days now? I've honestly lost count—which might be exactly what some in Washington are hoping for.
The practical effect for markets isn't just the economic drag Bessent warned about. It's the data drought. No government reports means traders are flying even blinder than usual, with sentiment and headlines filling the information vacuum.
The Senate rejected yet another funding bill this week—the tenth time, if you're scoring at home. This is beyond political theater; it's becoming economic sabotage.
Yield Signs
Perhaps the most overlooked development of the week (and potentially the most significant) was the two-year Treasury yield dropping to its lowest level in two years.
That's the market screaming for Fed rate cuts. But Fed's Miran seems to be listening to different voices, suggesting cuts greater than 50 basis points aren't necessary.
There's always this awkward dance between what the Fed says and what the market believes. My money's usually on the market getting its way... eventually.
What's Next?
Earnings season is upon us (thank goodness), which might—might—shift attention back to actual company performance instead of political posturing. But I wouldn't bet my 401(k) on it.
The bizarre pattern of alternating up and down days (🔴🟢🔴🟢🔴🟢) over the last six sessions tells me this is a market without conviction, waiting for something—anything—concrete to emerge.
For now, we're all hostage to the U.S.-China narrative. Two men, thousands of companies, billions in market value swinging on each carefully (or carelessly) worded statement.
In my twenty-odd years covering markets, I've never seen fundamentals so thoroughly overshadowed by political theater. It's exhausting, frankly.
Next week? Probably more of the same undignified seesaw. Though in this market, the surest bet is that whatever I predict won't happen.
Maybe that's the trading strategy we should all adopt—expect the opposite of whatever seems logical. It couldn't be worse than trying to decode diplomatic doublespeak while the government sits idle.
