DBG Markets: Market Report for Oct 15, 2025

Gold Holds $4100, Equities Face Pressure as Dovish Fed Meets Fragile Trade Landscape

US–China Trade Outlook: Relief Rally, But Fragile Foundation

Market sentiment has stabilized over the past two trading sessions following last weeks tariff shock, when U.S. President Donald Trump threatened to impose a 100% tariff on Chinese imports starting in November. Over the weekend, Trump softened his tone, saying “it will all be fine,” sparking a short-lived relief rally in risk assets.

However, the underlying trade relationship remains tense. The reciprocal port fee measures announced by both sides signal early signs of friction beneath the surface.

Powell Speech: Dovish Signal on Easing Bias

In his latest speech last night, Fed Chair Jerome Powell strongly reaffirmed the Federal Reserves easing bias, while signaling a more cautious approach to the pace of future cuts.

1. Employment Risks Take Priority — Dovish Signal

Powell delivered a clear warning on the labor market, calling the slowdown in hiring a rising risk to the U.S. economy.

“Rising downside risks to employment have shifted our assessment of the balance of risks,” Powell said.

He highlighted that a “less dynamic and softer labor market” has increased downside risks to employment. His remarks effectively reinforced expectations for further rate cuts — with markets now pricing in at least two additional cuts before year-end (October and December meetings).

2. Inflation & Tariffs — Policy Trade-Offs

Powell acknowledged that the administrations tariffs have contributed to higher inflation readings but stressed that beyond tariffs, “there are no broader inflationary pressures.”

He emphasized the delicate balancing act between supporting the labor market and containing inflation:

“There is no risk-free path for policy as we navigate the tension between our employment and inflation goals.”

This signals that the Feds priority is shifting more firmly toward supporting employment.

U.S. Stock Indices: Relief Rally Faces Key Resistance

U.S. equities rebounded at the start of the week, led by technology and consumer discretionary sectors. The NASDAQ Composite posted the strongest gains, followed by the S&P 500 and Dow Jones Industrial Average.

However, with the U.S. government shutdown delaying key economic data and trade tensions still unresolved, the rally remains fragile. A stall in negotiations or a shift in Fed expectations could trigger renewed volatility.

US500, H4 Chart

The technical picture for the S&P 500 (US500) remains clouded following the sharp decline from the all-time high zone of 6700–6760. The recent breakout below a rising wedge pattern confirms a structural shift, suggesting the index is likely to undergo a short-term bearish correction within the broader trend.

Key Resistance Zone: The 6700–6760 area remains the immediate and most critical overhead resistance. Sustained pressure below this zone confirms the bearish turn, maintaining a corrective bias for the foreseeable future. A breakout above this range is necessary to re-establish bullish momentum.

UT100, H4 Chart

The NASDAQ 100 (UT100) is exhibiting a similar setup to the S&P 500, with recent price action suggesting a potential reversal.

Key Technical Pivot: The 24800 level is the critical resistance to watch. Sustained pressure below 24800 would validate the bearish setup, deny the recent bullish momentum and potentially open the path for a deeper corrective pullback.

Outlook for US Equities Market: Despite this potential near-term bearish technical pattern, the broader landscape for U.S. equities remains structurally bullish. However, the recent escalation in U.S.–China trade tensions present the most significant downside risk. In effect, the short-term direction of the stock market is now largely contingent on the trade outlook.

Gold: Safe-Haven Demand Still in Play

Gold remains well supported by a combination of trade uncertainty, cautious policy signals, and a lack of fresh economic data due to the ongoing shutdown. The metal is holding firmly above the $4,100 level after last nights sharp pullback from its record high, suggesting that buyers are still firmly in control despite recent volatility.

XAU/USD, M30 Chart

From a technical perspective, the immediate support zone sits between $4,100 and $4,140, which has so far contained the retracement. The next key resistance is aligned with the $4,185 Fibonacci extension level, followed by the major psychological barrier at $4,200.

That said, short-term consolidation cannot be ruled out if risk sentiment stabilizes temporarily, or if buying momentum slows after the recent strong rally. Still, any pullback is likely to be technical in nature rather than a change in the broader trend at this point.