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Morning Bid U.S.

A Reuters Open Interest newsletter

What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial Markets, Reuters Open Interest

Oil prices jumped 4% following the announcement of a wave of new retaliatory sanctions on Russian crude over Moscow's repeated bombardment of Ukraine. This added some fresh trade and inflation anxiety on Wall Street, just as megacap Tesla tumbled overnight on a big profits miss.

U.S. President Donald Trump hit Russia's two biggest oil companies, Rosneft and Lukoil, with the sanctions in a turnaround that also saw him cancel a meeting with Russian counterpart Vladimir Putin. Although still down 15% year-on-year, U.S. crude jumped above $60 per barrel to two week highs.

Former Russian President Dmitry Medvedev said the latest Trump moves over Ukraine were "an act of war against Russia."

Britain sanctioned Rosneft and Lukoil last week. Separately, EU countries approved a 19th package of sanctions against Russia for the war that includes a ban on imports of Russian LNG.

And the move came as industry sources told Reuters Indian refiners were poised to sharply curtail imports of Russian oil to ensure they were in compliance with U.S. sanctions. New Delhi is under pressure from stiff U.S. trade tariffs over the issue.

The energy jolt comes as Wall Street awaits the September U.S. inflation report tomorrow and pushed up Treasury yields despite a decent 20-year bond auction on Wednesday. The dollar firmed too, with the yen hitting its weakest since October 10.

Gold regained some of its poise after steep losses earlier in the week.

Hit by a 10% earnings-day drop in Netflix and a 6% drop in chipmaker Texas Instruments, the S&P500 lost 0.5% on Wednesday as U.S.-China trade tensions heated up once again. Tesla's 4% stock drop overnight adds to the jitters after the electric car giant's fourth consecutive profit miss and Wall Street index futures failed to rebound ahead of Thursday's bell.

Intel tops Thursday's heavy earnings diary.

The China trade worries jangled more broadly.

According to a Reuters report, the Trump administration is considering a plan to curb an array of software-powered exports to China to retaliate against Beijing's latest round of rare earth export restrictions. Trump said the long-awaited meeting with Chinese leader Xi Jinping may now not happen as the November 1 deadline for more severe U.S. tariffs looms.

The Philadelphia Semiconductor index tumbled 2.4%.

Trump's cabinet secretaries view China's move on rare earths as "full-blown economic war", a person familiar with administration thinking told Reuters. "The prospect for escalation is severe."

China's ruling Communist Party Central Committee, meanwhile, released a communique on its latest five-year plan, emphasizing a strong domestic market and an expansion of domestic demand.

Elsewhere, markets were more mixed as global political and trade issues jostled with waves of corporate earnings. China's stocks advanced, but Japan's Nikkei fell back more than 1%.

In today's column, I take a look at how Europe is navigating the trade crosswinds from both Washington and Beijing.

I’d love to hear from you, so please reach out to me at mike.dolan@thomsonreuters.com.

Data refreshes every time you open this email. For more U.S. market news, click here. Please send any feedback to morningbid@thomsonreuters.com.

Today's Market Minute

The United States hit Russia's major oil companies with sanctions on Wednesday and accused the Russians of a lack of commitment toward ending the war in Ukraine, as Moscow conducted a major training exercise involving nuclear arms.
Just a month after U.S. President Donald Trump hailed "progress" in talks with China, the world's two most powerful nations are scrambling to salvage a planned summit of their leaders, now just a week away, while trading blame for a spike in tension.
The Trump administration is considering a plan to curb a dizzying array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing's latest round of rare earth export restrictions, according to a U.S. official and three people briefed by U.S. authorities.
Critical minerals, the ongoing need to decarbonise and a bigger role for governments are the three top areas of concern for the global mining industry. Read the latest from ROI Asia Commodities Columnist Clyde Russell.
European governments seeking to expand offshore wind power are increasingly wary of Chinese companies’ involvement. Countering China’s dominance will be time-consuming and expensive, but political pressure and national security concerns may give the region little choice, argues ROI Energy Columnist Ron Bousso.

Europe's economy caught in 100 mph trade winds

Europe's economy is walking a precarious tightrope between geopolitics and global economic power plays, which will either force it to diversify its trade and become more self-reliant or get toppled by ferocious crosswinds.

The European Union has chosen to "eat" U.S. President Donald Trump's tariff sweep rather than retaliate, perhaps because of the need to keep Washington onside in the region's security standoff with Russia over Ukraine.

But it risks indirectly eating some of the U.S. tariffs on China too. If Beijing reroutes its massive industrial overcapacity toward Europe, this could undercut the bloc's domestic manufacturers and create disinflationary risks to boot.

China overtook the U.S. as Germany's largest trading partner in the first eight months of 2025, regaining the top spot it had previously held for eight years. German exports to the U.S. dropped by more than 7% year-on-year in this period, likely because of the higher U.S. tariffs.

German exports to China also fell during these months and by an even larger 13.5%, but imports from China jumped more than 8%.

Graphics are produced by Reuters.

What's more, China's close ties with Russia further complicate any EU embrace of trade with the world's second-largest economy, whether due to the bloc's own security concerns or even those of Washington.

These security fears were on full display this month as the Dutch government seized control of chipmaker Nexperia, citing fears the company's technology would be taken by Chinese owner, Shanghai-listed Wingtech <600745.SS>.

China, where most of Nexperia's chips are packaged, responded by blocking exports of the company's finished products, alarming European automakers that rely on these goods and leading to warnings of production stoppages.

While this is just one vignette, it comes as China has been curbing exports of critical rare earth metals, a key bargaining chip in its tense standoff with Washington. Even if U.S. industry is the target, the export controls negatively affect Europe too.

"A delicate balancing act for European policymakers has barely started," said UniCredit economist Andreas Rees, adding that the "complexity of U.S.-China-EU realpolitik has already been on full display" over the Nexperia row.