October 22, 2025
Rare earth controls moved from geopolitics into valuation. China announced restrictions requiring government approval before foreign firms export products from China that contain even trace amounts of certain rare earths. The materials are used in semiconductors, EVs, defense systems, motors, drones, and other advanced technologies.
The concentration risk is large. China accounts for close to 70% of global rare earth output, producing about 270,000 tons annually versus roughly 45,000 tons in the U.S. The U.S. also has no refined production for several highlighted elements, which makes processing capacity as important as mining. President Trump responded by threatening a 100% tariff on Chinese imports and new export controls on critical U.S. software.
Markets reacted quickly. On October 10, the S&P 500 fell 2.7%, the Nasdaq dropped 3.5%, and the Dow lost nearly 900 points. The issue for companies is whether approvals slow exports, raise input costs, delay production, or force more capex into supply-chain diversification.
The macro backdrop was mixed. The IMF expected global growth of 2.6% by the end of 2025, down from 3.6% in 2024. U.S. growth was projected at 1.9%. Jerome Powell signaled the Fed remained on track to cut rates and might soon end balance sheet reduction from its $6.6 trillion Treasury and mortgage-backed securities portfolio, though the government shutdown limited access to data.
Policy and industrial strategy stayed active. California expanded review authority over healthcare transactions starting in January 2026, after private equity spent $46.9 billion on healthcare providers nationwide from 2019 to 2023, including $4.3 billion in California. GM expects a $1.6 billion charge tied to EV strategy, while Stellantis announced a $13 billion U.S. manufacturing investment. The U.S. also announced an $8.9 billion common stock investment in Intel for a passive 9.9% stake.
AI infrastructure remained one of the largest capital themes. BlackRock, GIP, and Abu Dhabi's MGX launched a $40 billion acquisition of Aligned Data Centers and plan to deploy $100 billion, split between $30 billion of equity and $70 billion of debt. Private credit risk also showed up after First Brands exposed Jefferies-linked funds to about $715 million of receivables and UBS-linked funds to about $500 million.