U.S. stocks rallied Monday after President Donald Trump struck a more optimistic tone on trade relations with China, helping markets recover from Friday’s sharp sell-off.
The Dow Jones Industrial Average jumped more than 400 points, or about 1%, while the S&P 500 gained 1.1% and the Nasdaq Composite climbed 1.5%. The rebound comes after Friday’s rout, when Trump’s threat to double tariffs on Chinese goods triggered a massive sell-off that erased roughly $2 trillion in market value.
Over the weekend, Trump sought to ease tensions, writing on Truth Social, “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it.”
The president’s comments appeared to reassure investors that the trade dispute may not escalate further. On Friday, he warned that Washington could impose an additional 100% tariff on Chinese goods starting Nov. 1, a statement that reignited fears of a broader U.S.-China trade war.
“Trump’s softer tone this time seems aimed at calming markets without backing down completely,” said Jeff Kilburg, founder of KKM Financial. “It gives investors a reason to step back in after last week’s panic.”
China’s own economic data also offered a boost. The country’s export growth exceeded expectations in September, suggesting that Beijing is successfully expanding trade with other partners even as relations with the U.S. remain tense.
In corporate news, optimism around artificial intelligence helped tech shares lead Monday’s rebound. Broadcom (AVGO) surged 6% after announcing a new AI chip partnership with OpenAI, adding to a string of recent AI-related collaborations.
Meanwhile, Wall Street remains cautious amid the ongoing U.S. government shutdown, which has stretched into its second full week. The shutdown has already delayed several key economic reports, including the consumer inflation data, now rescheduled for Oct. 24. Analysts warn that the lack of data could make it harder for the Federal Reserve to assess the economy’s direction.
Investors are also looking ahead to a packed earnings season, which kicks off Tuesday. Major banks including JPMorgan Chase, Goldman Sachs, Wells Fargo, and Citigroup will report quarterly results, followed by Bank of America and Morgan Stanley on Wednesday. Analysts expect profits for the six biggest banks to rise roughly 6% year-over-year, according to Bloomberg data.
Markets will also be listening closely to Federal Reserve Chair Jerome Powell, who is set to speak Tuesday on the economic outlook and monetary policy amid growing uncertainty.
While traders remain wary of further trade shocks or political stalemates, Monday’s rally suggests that for now, Wall Street is finding relief in Trump’s more conciliatory tone toward Beijing.
