The Economic Times·2025-10-14 15:06Market Overview - The Dow Jones Industrial Average dropped 504 points (1.1%), the S&P 500 lost 1.3%, and the Nasdaq Composite slid nearly 2% on October 14, 2025, due to renewed trade tensions between the U.S. and China [2][11] - The Cboe Volatility Index (VIX) spiked above 22, indicating heightened anxiety among investors [2][13] Trade Tensions - China's new trade sanctions target U.S. subsidiaries of South Korea's Hanwha Ocean, effectively blocking them from operating in China, which investors perceive as retaliation against U.S. tariff threats [6][8] - The sanctions are part of escalating tensions over rare earth exports, crucial for technology and electric vehicle manufacturing [11][13] Impact on Technology Sector - AI and tech stocks, which had previously driven market gains, were hit hardest during the sell-off, with Nvidia down 3.9%, Tesla down 3.8%, and Oracle down 4.3% despite strong earnings reports [3][12][18] - The ongoing geopolitical risks overshadowed positive corporate earnings, leading to declines in major financial institutions like Goldman Sachs, JPMorgan, and Wells Fargo, even after they beat earnings estimates [15][16][18] Economic Outlook - The U.S. government shutdown is projected to continue into November, potentially trimming 0.8 percentage points from GDP and affecting 750,000 federal workers, which could dampen investor sentiment [6][23] - The International Monetary Fund warned of significant risks to banks if issues arise in non-bank financial institutions, with European lenders being particularly exposed [21] Global Market Reactions - European stocks also fell, with the Stoxx Europe 600 dropping 0.7% and the France CAC 40 slipping 0.5% amid increasing trade worries [19] - Commodities saw mixed reactions, with gold hitting an all-time high while crude oil prices slid 2% due to fears of slowing global demand [25]