Background of New York Stock Market Decline on October 22: Delayed Interest Rate Cut Outlook and Market Shock Commentary

                                                

       

[Economic Analysis] New York Stock Market Decline on October 22

       

On October 22, 2025, the New York stock market saw all three major indices—the Dow Jones, S&P 500, and Nasdaq—close down. This decline is analyzed as the complex result of two key factors: deepening US-China trade conflict and poor earnings from major companies. In particular, the simultaneous drop in the market's core technology stocks significantly dampened investor sentiment (sentiment).

   

   

Analysis of the New York Stock Market Decline on October 22 | The Shock of US-China Trade Tensions and Poor Earnings

   

1. Deepening US-China Trade Tensions: Concerns over Software Export Control

   

One of the main causes of the New York stock market decline was the news of the US government considering additional sanctions against China. Investor sentiment cooled rapidly after news broke that the US government was considering measures to broadly restrict the export of its software-based products targeting China.

   

This is interpreted as a retaliatory measure for China's tightening of rare earth export controls, reflecting the market's disappointment that US-China trade tension will not be easily resolved.

   

       
• Background: China's tightening of rare earth export controls
       
• US Response: Consideration of restricting the export of core software-based products to China
       
• Market Impact: Sell-off due to concerns over prolonged trade conflict and increased uncertainty
   

                 

                  

         

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2. Major Corporate Earnings Announcements: Performance Indicators Falling Below Expectations

   

In addition to US-China trade tensions, earnings announcements from major companies that fell short of market expectations also put a damper on investor sentiment.

        

Slump in Technology Stocks (Technology Stocks)

   

In particular, the lower-than-expected earnings from entertainment giants and semiconductor companies led the overall market decline. As the core technology stocks that have driven market growth failed to meet expectations, it is analyzed that investors heightened their caution and increased the sale of risk assets (risk assets).

   

       
• Netflix (Netflix): With the release of its Q3 adjusted Earnings Per Share (EPS) after market close falling short of market expectations, its stock price plunged by 10% in a single day.
       
• Tesla (Tesla): Although revenue exceeded market forecasts, adjusted Earnings Per Share (EPS) recorded $0.50, falling below the expected $0.54, and net income also decreased by 37% compared to the same period last year, leading to a decline in after-hours trading.
       
• Semiconductor Companies: Texas Instruments fell by 5.60% after issuing a low revenue and profit outlook, and major semiconductor stocks including onsemi (-5.72%), AMD (-3%), and Micron (-1%) also showed weakness, causing the Philadelphia Semiconductor Index to drop by 2.36%.
   

   

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3. Outlook for Delayed Pace of Interest Rate Cuts and Rising Market Interest Rates

   

According to some analyses, the rise in market interest rates due to the outlook that the Federal Reserve's (Fed) pace of interest rate cuts may be slower than expected also influenced the backdrop of the New York stock market decline.

   

As a diagnosis (Economic Trends Report) emerged that the US economy is still showing a solid performance, the expectation for interest rate cuts receded and market interest rates rose.

   

Major Market Index Changes (Oct 22, 2025)

                                                                                                                                                                                                                                                                                                                                       

Index Classification	Closing Price (Points)	Decline Rate from Previous Trading Day
Dow Jones Industrial Average	46,590.41	-0.71%
S&P 500 Index	6,699.40	-0.53%
Nasdaq Index	22,740.40	-0.93%

   

Source: New York Stock Exchange (NYSE)

   

Overall, the New York stock market on October 22 showed a correctional phase as the macroscopic uncertainty of the US-China trade conflict and the microscopic negative factor of poor corporate earnings overlapped. However, some views also attribute this to the psychological impact ahead of the election, such as the possibility of former President Trump being elected.

        

        Key Summary:
        The decline in the New York stock market is the result of the simultaneous action of two negative factors: the deepening US-China trade tensions due to the consideration of software export controls, and the poor earnings of major technology stocks like Netflix and Tesla.    

        

This video discusses the outlook for a delayed pace of interest rate cuts, which is analyzed to have influenced the New York stock market decline.      New York Stock Market Simultaneously Falls Around 1%... "Interest Rate Cut Delayed" / KBS 2024.10.24.

   

     

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