{"id":73402,"date":"2026-10-21T20:38:15","date_gmt":"2026-10-22T00:38:15","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-retreat-as-musk-eyes-3-7-trillion-tesla-spacex-merger-fortescue-warns-of-china-supply-hit\/73402\/"},"modified":"2026-10-21T20:38:15","modified_gmt":"2026-10-22T00:38:15","slug":"global-markets-retreat-as-musk-eyes-3-7-trillion-tesla-spacex-merger-fortescue-warns-of-china-supply-hit","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-retreat-as-musk-eyes-3-7-trillion-tesla-spacex-merger-fortescue-warns-of-china-supply-hit\/73402\/","title":{"rendered":"Global Markets Retreat as Musk Eyes $3.7 Trillion Tesla-SpaceX Merger; Fortescue Warns of China Supply Hit"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Elon Musk is reportedly pursuing a massive $3.7 trillion merger<\/strong> between Tesla (<a href=\"\/stock\/TSLA\">TSLA<\/a>) and SpaceX (<a href=\"\/stock\/SPCX\">SPCX<\/a>) before the end of the current U.S. administration.<\/li>\n<li><strong>Fortescue (<a href=\"\/stock\/FMG\">FMG<\/a>) warned of potential production cuts<\/strong> as a standoff with China Mineral Resources Group (CMRG) caused Q1 sales to lag shipments by nearly 4 million metric tons.<\/li>\n<li><strong>European and Japanese markets opened lower<\/strong>, with Nikkei futures dropping 0.7% and the FTSE 100 down 0.5% amid geopolitical tensions and rising bond yields.<\/li>\n<li><strong>BHP (<a href=\"\/stock\/BHP\">BHP<\/a>) remains cautious on <a href=\"https:\/\/stockmarketwatch.com\/metal\/uranium\" data-internallinksmanager029f6b8e52c=\"13\" title=\"Uranium\">uranium<\/a><\/strong>, with executives stating the market is currently &quot;too small&quot; for immediate entry despite a 140% surge in long-term prices over five years.<\/li>\n<li><strong>Geopolitical friction intensified<\/strong> as President Trump claimed a &quot;crushing defeat&quot; over Tehran, while Beijing allowed a Philippine resupply mission to a disputed warship in the South China Sea.<\/li>\n<\/ul>\n<hr>\n<h2>Musk Targets Historic $3.7 Trillion Tesla-SpaceX Merger<\/h2>\n<p>Elon Musk is moving to consolidate his industrial empire by merging Tesla (<a href=\"\/stock\/TSLA\">TSLA<\/a>) and SpaceX (<a href=\"\/stock\/SPCX\">SPCX<\/a>) in a deal valued at approximately <strong>$3.7 trillion<\/strong>. According to <em>Bloomberg<\/em>, Musk is rushing to finalize the merger before President Trump leaves office to secure favorable regulatory conditions. The proposed deal could see SpaceX acquire Tesla at a rumored price of <strong>$420 per share<\/strong>, paid in SpaceX stock.<\/p>\n<p>The merger comes as Tesla slashes its 2026 capital expenditure forecast to <strong>$20 billion<\/strong>, down from a previous <strong>$25 billion<\/strong>. While Tesla reported a surprise positive free cash flow of <strong>$1.53 billion<\/strong> in the third quarter, analysts noted that the company is investing significantly less in AI and robotics than previously anticipated.<\/p>\n<h2>Fortescue Faces China Standoff; BHP Shuns Uranium<\/h2>\n<p>Fortescue (<a href=\"\/stock\/FMG\">FMG<\/a>) has signaled it may be forced to adjust its annual production guidance if negotiations with China\u2019s state-backed buyer, CMRG, are not resolved by year-end. The miner reported that iron ore sales for the September quarter were only <strong>42.9 million metric tons<\/strong>, significantly trailing the <strong>46.8 million tons<\/strong> actually shipped. This gap reflects a coordinated effort by Beijing to restrict certain Fortescue products to gain leverage in price negotiations.<\/p>\n<p>In contrast, BHP (<a href=\"\/stock\/BHP\">BHP<\/a>) Chief Commercial Officer Rag Udd (and former CEO Mike Henry&#39;s successor team) indicated that while uranium demand is rising, the company has no immediate plans to enter the market. BHP executives noted that the uranium market remains &quot;too small&quot; for the company&#39;s current scale, despite spot prices reaching <strong>$94.28\/lb<\/strong> in early 2026.<\/p>\n<h2>Global Markets and Bond Yields Under Pressure<\/h2>\n<p>Equity markets faced broad selling pressure in early Thursday trading. <strong>Nikkei Average Futures<\/strong> dropped <strong>0.7%<\/strong>, while European benchmarks including the <strong>FTSE 100<\/strong> and <strong>DAX<\/strong> fell between <strong>0.4% and 0.5%<\/strong>. The decline follows a period of heightened volatility in the fixed-income space, where the <strong>Japanese 10-Year JGB yield<\/strong> declined 2 basis points to <strong>2.87%<\/strong>, though it remains more than 120 basis points higher than a year ago.<\/p>\n<p>The yield on Japan&#39;s 5-year government bonds also edged lower to <strong>2.285%<\/strong>. Investors are closely monitoring the spread between U.S. and Japanese 10-year bonds, which currently sits at approximately <strong>223.7 basis points<\/strong>, as the U.S. 10-year yield holds above <strong>5.1%<\/strong>.<\/p>\n<h2>Geopolitical Tensions: Iran and South China Sea<\/h2>\n<p>President Trump escalated rhetoric against Iran, claiming on <em>Truth Social<\/em> that the U.S. has delivered a &quot;crushing defeat&quot; to Tehran both militarily and financially. These comments come amid reports of a &quot;2026 Iran War&quot; involving hundreds of air strikes and the disruption of the <strong>Strait of Hormuz<\/strong>. Trump warned that Washington is prepared to &quot;finish the job&quot; if the Iranian regime does not rapidly change its course.<\/p>\n<p>In the South China Sea, a brief de-escalation occurred as Beijing announced it had allowed the Philippines to resupply the <strong>BRP Sierra Madre<\/strong>, a warship grounded at the Second Thomas Shoal. The China Coast Guard stated they &quot;monitored&quot; the delivery of necessities, a move seen as a rare diplomatic concession amid ongoing territorial disputes that have seen multiple naval standoffs in recent months.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Elon Musk is reportedly pursuing a massive $3.7 trillion merger between Tesla (TSLA) and SpaceX (SPCX) before the 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