WSJ What’s News – PM Edition, October 10, 2025

Episode: U.S. Stocks Tumble as Trump Threatens Higher Tariffs on China

Episode Overview

This episode dives into the sudden downturn in U.S. stocks following President Trump's threats to raise tariffs on China amidst escalating trade tensions. In addition to the market impact, the episode explores China's leverage via rare earth restrictions, a key regulatory probe, and broader global developments including the Gaza ceasefire, federal layoffs during a government shutdown, Ukraine's blackouts, and MIT's decision to reject a major Trump administration policy for universities.

Key Discussion Points and Insights

1. U.S.-China Trade Tensions & Stock Market Tumult

• Escalation of Trade War Rhetoric

  • President Trump threatened to increase tariffs and impose new export controls on China after a series of moves by Beijing, including:
    • Restrictions on rare earth materials: China, which dominates supply and processing, holds significant leverage.
    • Regulatory investigation into Qualcomm: China's top market regulator began probing Qualcomm for antitrust violations linked to its Autotalks acquisition ([01:33]).
  • Trump signaled the planned meeting with Chinese leader Xi Jinping at the APEC summit in South Korea would not proceed, declaring "no reason to meet" ([01:56]).

• Market Response

  • Major U.S. indices fell sharply:
    • Nasdaq: –3.6%
    • S&P 500: –2.7%
    • Dow: –1.9%
    • Chipmakers hit especially hard (AMD –7.7%, Broadcom –6%) ([02:25]).
    • Regional bank stocks slumped due to fears over economic fallout.
  • Quote (Jack Pitcher, WSJ Markets Reporter, [02:53]):

    “A lot of the enthusiasm we've seen over the last six months was about the idea that Trump didn't really mean what he said on the trade war... The reintroduction today of escalating tensions with China sparked a lot of fears because a trade war is not just a one way street. We're opening up a path where China can introduce large new levies as well, and that has investors feeling some of the same fears that they did back in April.”

2. Commodities Market: Aluminum in Focus

• Metals Rally
  • Gold surpassed $4,000/oz; silver neared a record high; copper and other industrial metals also strong ([03:26]).
• Aluminum’s Notable Shift
  • Jinju Lee (WSJ columnist) explains ([04:01–05:56]):
    • Aluminum has long been abundant due to cheap, coal-powered Chinese production.
    • Now, China is hitting its self-imposed production cap.
    • Growing demand (driven by EVs, solar, data centers) is on a collision course with supply constraints.
    • Aluminum production is highly energy-intensive; electricity shortages are a looming bottleneck.
    • Recycling has limits; not all applications can use recycled aluminum.
    • U.S. production is unlikely to rise—only four smelters remain due to high electricity costs.
  • Quote (Jinju Lee at [05:37]):

    “There’s actually only four aluminum smelters left operating in the US that just tells you how difficult it is.”

3. Federal Layoffs Amid Government Shutdown

• White House Initiates Mass Layoffs
  • In response to a shutdown now in its 10th day, the Trump administration is laying off thousands of federal employees, mostly in the Departments of Health and Human Services, Education, Commerce, and Treasury ([06:04]).
  • This unprecedented step is seen as pressure on Democrats.
• Political Response
  • House Minority Leader Hakeem Jeffries ([06:47]):

    “The American people are sick and tired of the chaos, crisis and confusion that has been visited upon the country by Donald Trump and Republican complete control of Congress.”

  • Senate Majority Leader John Thune adds ([07:10]):

    “We need five bold, courageous Democrats with a backbone who are willing to take on their far left activist base. Join us in passing. This could do it anytime.”

4. Middle East & Ukraine Updates

• Gaza Ceasefire
  • Israeli troops withdrew from parts of Gaza as a ceasefire takes effect; Hamas is moving internal security forces back in ([07:29]).
  • A 72-hour window for the release of hostages begins, with final negotiations on prisoner exchanges and border controls ongoing ([07:29–08:26]).
• Ukraine: Russian Attacks and a Humanitarian Channel
  • Russia launched heavy drone and missile strikes, hitting energy infrastructure.
  • First Lady Melania Trump announced a diplomatic "back channel" with Putin succeeded in reuniting eight Ukrainian children with families ([08:58–09:35]).
  • Melania Trump ([09:35]):

    “My representative has been working directly with President Putin's team to ensure the safe reunification of children with their families.”

  • Nearly 20,000 Ukrainian children have reportedly been abducted since Russia’s invasion; only a fraction have returned.

5. French Political Uncertainty

• Macron Reinstates Prime Minister
  • President Emmanuel Macron reappointed Sebastian Lecornue less than a week after his resignation, raising concerns about French political stability and legislative gridlock ([09:56]).

6. MIT Rejects Trump Administration’s Higher Ed Compact

• Policy Context
  • The "Compact for Academic Excellence in Higher Education" was offered to nine elite universities, tying federal funding perks to controls on admissions, hiring, and student life ([11:06]).
• MIT’s Rejection
  • MIT is the first to decline, insisting that research funding should depend solely on scientific merit—warning that political strings threaten academic freedom ([11:29]).
  • Doug Belkin (WSJ Higher Education Reporter):

    "These things are extraneous and they're essentially going to get in the way of science.” ([11:29])

  • Doug Belkin on broader implications ([11:57]):

    “At the foundation, the same sticking point exists. Universities take a lot of money from the federal government...but they have almost entirely been allowed to operate as they see fit. And this is the Trump administration saying those days are over.”

  • Potential for other universities to follow MIT’s lead due to its prestige and political significance.
  • MIT’s critical role in defense research adds sensitivity ([12:40]).

Notable Quotes & Memorable Moments

• Jack Pitcher on Market Fears ([02:53]):

  “We’re opening up a path where China can introduce large new levies as well, and that has investors feeling some of the same fears that they did back in April.”

• Jinju Lee on U.S. Aluminum Outlook ([05:37]):

  “There’s actually only four aluminum smelters left operating in the US that just tells you how difficult it is.”

• Hakeem Jeffries on Political Blame ([06:47]):

  “The American people are sick and tired of the chaos, crisis and confusion that has been visited upon the country by Donald Trump and Republican complete control of Congress.”

• Melania Trump on Child Reunification ([09:35]):

  “My representative has been working directly with President Putin's team to ensure the safe reunification of children with their families.”

• Doug Belkin on MIT’s Position ([11:29]):

  “These things are extraneous and they're essentially going to get in the way of science.”

Timestamps for Key Segments

• 00:32 – Episode news rundown and market headlines
• 01:33 – China’s rare earth policies & Qualcomm investigation
• 02:25 – Impact of Trump tariff threat on U.S. markets
• 02:53 – Jack Pitcher: analysis of market fears
• 03:26 – Rise in metals, commodities discussion
• 04:01 – Jinju Lee explains aluminum market shifts
• 05:37 – Outlook for U.S. aluminum production
• 06:04 – Federal employee layoffs; shutdown politics
• 06:47 – Hakeem Jeffries on chaos & blame
• 07:29 – Ceasefire and troop withdrawal in Gaza
• 08:58 – Russia’s Ukraine assault; Melania Trump’s diplomatic role
• 09:56 – Macron’s French government shakeup
• 11:06 – MIT rejects the federal higher ed compact (Doug Belkin)
• 12:40 – Broader implications for U.S. universities

Summary Tone

The reporting is brisk, data-driven, and direct, blending straight analysis with pointed quotes from policymakers and subject-matter experts. The episode’s tone is urgent but measured, capturing financial anxiety, geopolitical complexity, and domestic policy fights—typical for WSJ’s business-first, fact-focused coverage.