Perspective: Morning Commentary October 17

By: Arlan Suderman, Chief Commodities Economist

Fri, 17 Oct 2025, 13:26

Today's Perspective Video: Ag Markets Feel the Strain

October 17 – It’s day #17 of the partial government shutdown, but Wall Street is focused on China and on President Trump’s threat to put another 100% tariff on products from China as a result of what it has done to hold the world hostage for rare earth minerals and magnets. Stock futures came under pressure overnight as Wall Street also worried about bad loans held by regional banks, but then they pared losses following a comment by President Trump this morning stating that his new 100% tariffs on China are not sustainable, and that he would be meeting with China’s President Xi in two weeks and things should be fine with China. The VIX spiked to a nearly six-month high of 29 overnight on the banking concerns, but it has since pulled back to trade near 24. The dollar index is trading near 98.4 at this time. Yields on 10-year Treasuries are trading near 4.00%, after dipping to a six-month low below 3.94% overnight on the regional bank concerns, while yields on 2-year Treasuries are trading near 3.45%. Crude oil prices are trading near steady at this hour after falling to fresh five-month lows overnight, while the grain and oilseed markets are mostly steady to firm after President Trump’s comment this morning.

Global bank shares came under pressure overnight after a selloff in U.S. regional bank shares raised concerns about credit quality and on rising risks in the banking sector. This most recent selloff came after Zions reported that it will take a $50 million loss on two commercial and industrial loans from its California unit, while Western Alliance stated that it had initiated a lawsuit alleging fraud by Cantor Group V, LLC, which it denies. Those two events combined to raise fears of credit risk in the less-regulated regional banking sector. The events of the past 24 hours sparked memories of the 2023 bank selloff following the failure of some regional banks. It’s just one more thing for investors to worry about at a time when stocks are near record high levels, leaving them a bit more vulnerable.

President Trump eased concerns about China this morning by comments made during an interview on Fox Business when he stated that tariffs of 157% on China - current tariffs plus his newly threatened 100% tariff to be effective on November 1 – are not sustainable. He indicated that he didn’t want to put the extra 100% tariffs on China, but they forced him to do it with their threat to withhold rare earth minerals and magnets from the world. Trump indicated that things will be alright with China once he and President Xi are able to meet on the sideline of the APEC conference in South Korea in a couple of weeks. That reassured investors that President Trump will seek to avoid taking steps that threaten market stability while trying to stand up to China’s monopoly of rare earth minerals and magnets.

The primary tensions between China and the United States currently are rare earth minerals and magnets, and port fees on ships owned, operated and/or built by each respective party at the other’s ports. These issues appear to be a tit-for-tat spat between two powerful countries, but they’re much larger issues than that. China started working on a plan to build a monopoly over processed rare earth minerals several decades ago, which would give it the ability to pick winners and losers in the world regarding economic growth and development, as I’ve outlined in more detail in previous columns. The port fees issue started during the Biden Administration when it became apparent that China was undercutting world shipbuilder costs, allowing it to capture a near-monopoly on shipbuilding in the world. It got to the point where the United States lacked enough boats to supply troop ships if we were to get into a major war. Theoretically, China’s control of ships on the waters also would have given it the ability to influence trade – picking winners and losers there as well. The U.S. port fees were designed to encourage global competition, in addition to helping to rebuild the U.S. shipbuilding capability for our own national security. China’s port fees were put in place as a step of retaliation. Shippers are currently rescheduling port calls and transshipping products through other countries to avoid the fees, slowing shipment and raising costs, but shippers have also started diversifying their ship orders to include non-China shipbuilding companies, which was a desired result.

China’s consumer confidence index rose nearly a point to 90.1 in September, and up from its record low of 84.2 in November 2022. Yet, an index below 100 still indicates downward risks for China’s economy over the next 6 – 12 months. China’s consumers put the bulk of their assets into their property, and that property continues to lose value due to low confidence in the Chinese economy and due to a declining population in China. New home sales are expected to fall by another 6 to 7% in 2026, after falling an estimated 8% this year. Many local governments fund their programs via taxes on these property sales, suggesting declining revenues amid continued rising debt levels as China finances many of its stimulus programs through these local government units. I am not by any means forecasting the collapse of China, but I am saying that the challenges continue to mount for Xi Jinping in keeping his economy going amid the obstacles that President Trump is creating toward reaching his stated goals.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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