UBS On-Air: Market Moves Signal over Noise with Ulrike Hoffmann-Burchardi
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Oct 12, 2025 This week, market dynamics are examined through the lens of U.S.-China trade tensions and their impact on volatility. Ulrike discusses the strength expected in U.S. bank earnings driven by increased trading activity and stable margins. She highlights strategic investments in AI, such as AMD's collaboration with OpenAI, and emphasizes TSMC’s report as a bellwether for capital expenditures. Ulrike also views the recent sell-off as a chance to buy into sectors like AI and U.S. financials, maintaining optimism for a pragmatic U.S.-China compromise ahead.
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Trade Policy Drives Market Moves
- Trade policy, not macro data, has been a primary market driver this year outside AI.
- Fridays have tended to produce negative S&P 500 returns since the inauguration, amplifying volatility.
Leverage: Rare Earths Versus Semiconductors
- China holds situational leverage via rare earth supply-chain dominance while the U.S. has structural leverage in semiconductors.
- Shifting either country's dependency will take significant capital, time, and political will.
Expect Near-Term Volatility, Tactical Truces
- Hardened positions on both sides should increase equity market volatility into month-end.
- Historical pattern shows escalation followed by tactical truces in U.S.-China negotiations.