Brent crude oil prices slipped on Monday after US President Donald Trump waived tariffs under the Graham Act on buyers of Russian oil. The waiver, signed late Friday, suspends tariffs of up to 500% on Russian goods and 100% on the five largest buyers of Russian oil and gas, including China, India, and Turkey. The move comes as tensions in the Middle East escalate, with at least nine commercial ships attacked near the Strait of Hormuz since October 11. Despite the geopolitical risks, the waiver has taken some premium out of crude prices, with Brent settling at $109.86 on Friday before dropping 1.8% to $107.86 on Monday.
US equities ended Friday at the week’s lows, with the Nasdaq falling 2.14% to 26,140.03, its worst day since July 23. The S&P 500 lost 1.09% to 7,659.44, and the Dow dropped 0.34%. The Philadelphia semiconductor index fell 3.83%, marking its eighth straight decline and a 16% drop since October 6. Semiconductor stocks like Micron, Intel, and AMD saw significant losses, with investors questioning whether the AI buildout has outrun returns. CoreWeave fell 11.9% on Friday, and another of its bond issues yielded more than 16%. SoftBank is in talks to buy security-services group Allied Universal for $18bn excluding debt, while the company itself fell 3.6% in Tokyo.
In Europe, French riots have pushed budget risks into OAT spreads and euro crosses ahead of a crucial revenue vote on Tuesday and Friday’s Moody’s review. The 10-year OAT yield added 8 basis points to 4.87%, while the euro hit a three-month low of 0.922 against the franc. Euro-area final September HICP was confirmed at 3.8%, the highest since September 2023, with energy contributing 1.71 percentage points. The ECB is expected to hold rates at its October 29 meeting, despite a hotter-than-forecast headline inflation figure.
China’s third-quarter GDP grew 4.5% from a year earlier, slightly above expectations, while September retail sales rose 1.1%, the fastest since March. However, fixed-asset investment is down 7.2% year to date. The PBOC fixed the yuan at 6.7208, its strongest since February 2023. Meanwhile, Jakarta’s benchmark fell 4.9% at the open to 4,930.24, its lowest since October 2020, after MSCI said Indonesia’s emerging-market status is no longer appropriate.