From the Trading Desk at Stipelis:
10-13-2025
The Macro View – Big Picture Insights for Portfolio Positioning
When the Dollar Falls, Stocks Follow
Friday’s session was a wake-up call for investors — a sharp, correlated selloff that rippled across equities, energy, and industrial metals. The S&P 500 plunged 2.7%, the Dow fell 1.9%, and the Nasdaq 100 lost 3.5%, erasing a week’s worth of gains in a single day. Beneath the surface, the message was clear: capital is repositioning for a slower growth cycle.
The selling wasn’t random. The U.S. Dollar Index slipped another 0.56% to 98.73, extending its year-to-date decline to nearly 9%. A weaker dollar should normally support risk assets, but this time, it coincided with a surge in volatility — the VIX jumped 31.8% to 21.66. When the dollar falls alongside equities, it signals that money is moving to safety rather than chasing return.
Gold’s record close at $4,000, up 51% year-to-date, underscores this defensive shift. Meanwhile, Treasury bonds rallied, with the 10-Year Note climbing 0.58%, hinting that investors are bracing for economic deceleration rather than inflation. The bond market, as usual, is turning first — signaling that yields may have peaked and policy tightening could be near an end.
Energy markets told a darker story. Crude oil tumbled 4.2% and natural gas nearly 5%, confirming weakening demand expectations. Copper, often seen as an industrial barometer, fell 4.5%, a clear warning about global manufacturing momentum. In short, commodities are splitting — precious metals are surging as safe havens, while growth-sensitive ones are rolling over.
The pattern is textbook macro rotation. When the dollar declines but commodities rise unevenly, markets are pricing in a slowdown, not a boom. Falling oil and copper align with falling bond yields — both signals of easing inflation and tightening liquidity.
For equities, the setup is fragile. Rising bond prices and a falling dollar have historically preceded stock market weakness when commodities like gold surge too fast. The reason is simple: liquidity is leaving the system and heading for safety.
Friday’s selloff may be the market’s way of adjusting to a new phase — one where the Fed’s next move is less important than the market’s perception of growth risk. The takeaway: the dollar’s weakness isn’t bullish when driven by fear. It’s a warning shot that confidence, not inflation, is the new concern.
Stephen Coleman – Founder Stipelis Global Trading LLC
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The opinions expressed are those of Stipelis Global Trading LLC and are considered market commentary. They are not intended to act as investment recommendations. Individuals should make investment decisions based on their own analysis and with direct consultation with a financial advisor.
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