Stock Market Weekly Forecast - Wall Street Suffers $1.5 Trillion Meltdown as Trump’s 100% Tariffs Slam Markets

Wall Street Suffers Its Sharpest Fall in Months as Trump’s 100% Tariffs Send Shockwaves Across Global Markets

The final trading day of the week saw a dramatic reversal in sentiment across U.S. equity markets. President Donald Trump’s declaration of 100% tariffs on Chinese imports, effective November 1, 2025, reignited a trade war that investors thought was buried. The announcement triggered panic selling across all major indices, with the S&P 500 (^GSPC) collapsing 2.7% to close at 6,552.51, the Nasdaq Composite (^IXIC) plunging 3.6% to 22,204.43, and the Dow Jones Industrial Average (^DJI) falling 1.9% to 45,479.60. The combined decline erased nearly $1.5 trillion in U.S. market capitalization in one day, marking Wall Street’s worst session since April. Market depth showed broad-based liquidation as technology, consumer discretionary, and industrial stocks led the downturn. Traders fled to cash and Treasuries amid fears that retaliatory measures from China could hit global trade flows and inflation expectations simultaneously.

Technology Giants Lead the Selloff as AI Euphoria Faces Its First True Test

The technology sector, which has fueled the Nasdaq’s 18% year-to-date gain, turned sharply lower. NVIDIA (NASDAQ: NVDA) slid 4.8% to $183.24, while Tesla (NASDAQ: TSLA) plunged 5% to $413.87 after investors trimmed exposure to high-beta names. Amazon (NASDAQ: AMZN) followed with a 5% loss to $216.41, as renewed tariff threats revived fears of supply chain disruptions. Apple (NASDAQ: AAPL) fell 3.4% to $245.39, pressured by its heavy China exposure, while Microsoft (NASDAQ: MSFT) eased 2.2% to $511.07. Alphabet (NASDAQ: GOOG) dropped 2% to $237.38, and Meta Platforms (NASDAQ: META) declined 3.8% to $705.40, with traders citing stretched valuations and heavy AI-linked positioning. The Philadelphia Semiconductor Index slipped 3.5%, mirroring risk-off sentiment across growth assets. Despite the correction, analysts believe the underlying AI spending boom continues to support long-term upside, but volatility will remain elevated through Q4.

Trade War Escalation Reopens 2019 Scars and Threatens to Slow Global Growth

Trump’s latest tariff decision raises total duties on Chinese goods to 130%, more than quadruple the levels seen during the early phases of the U.S.-China trade conflict. In retaliation, Beijing introduced “special port fees” on American-operated vessels and limited exports of rare-earth minerals crucial to semiconductor, EV, and defense production. The move comes as China already controls more than 80% of global rare-earth processing capacity, amplifying fears of supply bottlenecks. Economists warn the tariff escalation could shave 0.4% off U.S. GDP growth in the fourth quarter and weigh on S&P 500 earnings by as much as 6%. The U.S. dollar index (DXY) rose to 108.2, reflecting safe-haven demand, while Treasury yields fell as the 10-year note slipped to 3.88%, its lowest since July.

Institutional Leaders Warn of Correction Risk and Market Overvaluation

Market heavyweights urged caution as equity valuations remain near record highs. Jamie Dimon, CEO of JPMorgan Chase (NYSE: JPM), warned in an interview that “the probability of a significant market correction over the next year has increased,” citing frothy valuations and geopolitical risk. Gene Goldman, CIO at Cetera Investment Management, emphasized that “everything is priced for perfection,” leaving the market vulnerable to shocks. However, James St. Aubin of Ocean Park Asset Management noted that while short-term pressure is inevitable, the structural tailwinds behind artificial intelligence and automation remain intact. He added that investors should “prepare for volatility but not panic,” suggesting selective exposure to companies with durable earnings and minimal tariff exposure.

QuantumScape (NYSE: QS) Defies Gravity with a 200% Year-to-Date Surge

Amid the chaos, one of 2025’s most remarkable performers, QuantumScape (NYSE: QS), held its ground near $14.70, up 200% year-to-date despite Friday’s global selloff. The solid-state battery developer has captured investor attention after announcing major breakthroughs in production speed and strategic partnerships. Its Cobra separator process, now 25 times faster than the previous method, marked a technological leap in June and ignited a one-month rally of over 200%. In July, Volkswagen’s PowerCo division expanded its investment by $131 million to accelerate QSE-5 battery development. By late September, QuantumScape secured another major deal with Corning (NYSE: GLW) to co-engineer ceramic separators for high-volume manufacturing. Despite remaining pre-revenue, QuantumScape’s Q2 net loss of $229 million showed slight improvement from $243 million a year earlier. With $190 million in cash reserves and liquidity projected through 2029, the company appears financially stable. However, a 51% short interest underscores investor skepticism, making QS a battleground stock poised for violent swings.

Indian Markets Extend Gains as Global Volatility Builds

While U.S. indices faltered, Indian equities extended their rally on strong domestic sentiment and robust fund inflows. The BSE Sensex closed at 82,500.82, up 0.40%, while the NSE Nifty 50 gained 0.41% to 25,285.35, both advancing 1.5% for the week. The Nifty Midcap 100 rose 0.46%, and the Smallcap Index climbed 0.74%, marking a second consecutive week of gains. Sectoral breadth remained positive, with realty, healthcare, PSU banks, and consumer durables rising over 1.5% each, while metals lagged due to weaker global demand. The Bank Nifty rose 0.7%, led by ICICI Bank (NSE: ICICIBANK) and Axis Bank (NSE: AXISBANK). Technical indicators show the Nifty 50 forming a large bullish candle with higher highs, targeting 25,450–25,670, while the support zone shifted upward to 24,900–25,000.

Corporate Earnings and Inflation Data to Steer Next Week’s Moves

Over 200 companies, including Reliance Industries (NSE: RELIANCE), Infosys (NSE: INFY), and HCL Technologies (NSE: HCLTECH), will report Q2 FY2026 earnings this week. Results will test market optimism as traders watch for signs of margin pressure amid higher input costs. On the macro front, India’s CPI for September will be released on October 13, followed by WPI inflation on October 14. Economists forecast CPI easing to 4.9%, slightly below August levels, while WPI is expected near 1.8%. A sustained cooling in inflation could allow the Reserve Bank of India to maintain its neutral stance through Q4. Meanwhile, foreign portfolio investors turned net buyers, adding ₹1,751 crore between October 6–10, marking a welcome reversal after persistent outflows.

Commodities and Safe-Haven Assets Respond to Renewed Risk-Off Tone

Gold prices eased to $3,980 per ounce, slipping below the psychological $4,000 threshold after a week of profit-taking. Silver retreated from recent multi-decade highs, settling near $1,770 per kilogram as traders shifted toward liquidity. Crude oil (WTI) stabilized at $62.79 per barrel, reflecting both slower global demand and optimism about Indian fuel consumption heading into the festive season. The U.S. dollar’s rally weighed on commodities, while Treasury yields declined sharply, reflecting renewed safe-haven inflows. Analysts see the near-term range for gold (XAU/USD) between $3,940–$4,050, with upside potential if U.S. inflation moderates.

Global Market Outlook: Diverging Trends Ahead of Inflation Data

The week ahead will test the resilience of risk assets as inflation data, Q3 earnings, and trade tensions converge. The S&P 500 faces short-term support near 6,450 and resistance at 6,720, while the Nasdaq Composite will struggle to recover above 22,800 without a clear cooling in CPI. The Dow Jones is expected to consolidate around 45,000, with energy and industrials offering partial stability. In contrast, Indian markets are likely to maintain their bullish tone, supported by liquidity and strong corporate results.

Trading News Weekly Verdict

S&P 500 – Hold (Volatility expected between 6,450–6,720)
NASDAQ – Sell (Short-term correction risk remains elevated)
DOW JONES – Hold (Range-bound near 45,000)
QuantumScape (NYSE: QS) – Speculative Buy (Target $18, high volatility)
NIFTY 50 – Buy on dips (Support 24,900, Target 25,600)

That's TradingNEWS