Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 16, 2025. REUTERS/Jeenah Moon

By Mike Dolan

(Reuters) - What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

While U.S. and world markets got a bounce to start the week, spurred by optimism on trade, hopes for an end to the Washington shutdown and some relief from regional bank jitters, the Wall Street rally has stuttered early on Tuesday just as a deluge of corporate updates looms.

The election of Liberal Democratic Party leader and fiscal expansionist Sanae Takaichi as Japan's first female prime minister on Tuesday sustained Monday's surge in the Nikkei stock benchmark at record highs, but attention quickly switched to her pick for finance minister. The yen continued to weaken even after media reports that Satsuki Katayama was in the frame for the job and has previously advocated a much stronger currency.

China's stocks recorded their biggest gain in six weeks, meantime, as U.S. President Donald Trump expressed optimism about a potential fair trade deal with Chinese President Xi Jinping before the latest deadline on draconian tariffs hits on November 1. U.S. Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng this week.

This week's Communist Party meeting on a new five-year economic plan has also buoyed markets there.

Back stateside, there was some hope for an end to what's now set to be a 21-day government shutdown, now matching the second longest on record, after White House economic adviser Kevin Hassett said it could end as soon as this week.

Regional bank jitters also eased a touch as one of the names in the headlines last week, Zions Bancorp, reported decent earnings overnight despite taking a hefty loss on two loans and its stock rose 2% in after-hours trading.

But Wall Street stock futures fell back slightly before Tuesday's bell, however, as the corporate earnings really kick in. Netflix tops the diary, but big industrial and defense names are also reported.

Helped by a drop in crude oil prices to 5-month lows on Monday, U.S. Treasury yields were softer and the dollar was stronger - mainly on the falling yen. In a rare move these days, gold prices fell over 1% from this week's new records.

* Argentina's peso continued to weaken even after the central bank there signed a $20 billion exchange-rate stabilization agreement with the U.S. Treasury Department, six days ahead of a key midterm election. A group of U.S. banks, including JPMorgan, Bank of America and Goldman Sachs is hesitant to lend $20 billion to Argentina without guarantees or collateral, the Wall Street Journal reported.

* Euro zone banks may come under pressure if U.S. dollar funding - the lifeblood of financial markets - were to dry up, the European Central Bank's chief economist Philip Lane said on Tuesday amid concern over Trump's policies. Dollar funding fears have been at the back of central bankers' minds since Trump announced a wave of trade tariffs and began putting pressure on the Fed earlier this year.

* Trump's backing of Australia's critical minerals will bring much-needed financial support to the industry, but experts say the U.S. president will have to wait longer to shift the supply chain away from China and weaken its market dominance. Goldman Sachs flagged mounting risks to global supply chains of rare earths and other minerals in a note on Monday that emphasized China's dominance - as it controls 69% of rare earth mining, 92% of refining and 98% of magnet manufacturing.

In today's column, I take a look at the peculiar market mood, which seems simultaneously bullish and nervy.

Today's Market Minute

* European leaders, including from Britain, France, Germanyand the European Union, issued a joint statement with Ukraine onTuesday backing U.S. President Donald Trump's call for aceasefire at present battle lines. * Hardline conservative Sanae Takaichi was elected Japan'sfirst female prime minister on Tuesday, shattering the nation'sglass ceiling and setting it up for a forceful turn to theright. * Donald Trump's backing of Australia's critical mineralswill bring much-needed financial support to the industry, butexperts say the U.S. president will have to wait longer to shiftthe supply chain away from China and weaken its marketdominance. * The surge in gold, cryptocurrencies and stocks has sparkedclaims that the U.S. "debasement trade" is in full swing, butthe bond and the foreign exchange markets tell a very differentstory, writes ROI markets columnist Jamie McGeever,. * The deal to develop critical mineral supply chains betweenthe United States and Australia is not quite the game-changerneeded to end Western reliance on China, but it is an importantfirst step, argues ROI Asia commodities columnist ClydeRussell.

Chart of the day

Gold slipped back from its latest record high on Tuesday after an extraordinary 2025 that's seen it gain up to 66% - on course for its best year since 1979. Investment fund demand for gold exposure has been a key feature and data on exchange traded gold fund flows just show how much that has swelled this year.

Today's events to watch

* Canada September consumer prices (8:30 AM EDT)

* Federal Reserve Board Governor Christopher Waller speaks; European Central Bank President Christine Lagarde speaks

* U.S. corporate earnings: Netflix, Omnicom, Texas Instruments, Lockheed Martin, Northrop Grumman, Pentair, Halliburton, General Motors, Paccar, Capital One, Nasdaq, 3M, Equifax, EQT, Intuitive Surgical, Quest Diagnostics, Coca-Cola, Philip Morris, Chubb, Danaher, Elevance, RTX, Genuine Parts, Pultegroup

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Mike Dolan; Editing by Alison Williams.)