The Dow Jones Industrial Average rose 501.83 points, or 1.10%, to 45,981.43, the S&P 500 gained 81.48 points, or 1.24%, to 6,633.98, and the Nasdaq climbed 342.13 points, or 1.54%, to 22,546.56.
“Don’t worry about China,” Trump said on his social media platform on Sunday. He also said that China’s leader, Xi Jinping, “doesn’t want a depression for his country, and neither do I. The US wants to help China, not harm it!!!”
It was a sharp turnaround from the anger Trump showed on Friday, when he accused China of “a moral turpitude in dealing with other countries.” He pointed to “an extremely hostile letter” detailing restrictions on the export of rare earth metals, materials used in the production of everything from personal electronics to jet engines. Trump said at the time that he could impose an additional 100% tax on imports from China from November 1.
Trump’s outburst raised hopes that the world’s two largest economies could find a working relationship that would allow global trade to continue.
The market’s big moves over the past two days mirror the manic swings in April, when Trump shocked investors with his “Liberation Day” announcement of global tariffs, only to eventually relent to many to buy time to negotiate trade deals with other countries. If this time ends similarly, with trade tensions and uncertainty easing, possibly even after a sharp drop in stock prices, conditions could allow for a rolling recovery into 2026, Morgan Stanley said. Streets led by Michael Wilson. To be fair, the US stock market may have been ready for a decline and was just looking for a potential trigger.
There was already criticism that prices had risen too high following the S&P 500’s almost brutal 35% rise from its April low. The index, which dictates movements for many 401(k) accounts, is still near its all-time high set last week.
Not only did Trump’s tariff pullback in April help boost stock prices, but so did expectations for several rate cuts by the Federal Reserve to help the economy.
Critics say the market now looks overpriced as prices rose much faster than corporate profits. Concerns are particularly high about companies in the artificial intelligence industry, where pessimists see echoes of the 2000 dot-com bubble that burst. For stocks to look cheaper, their prices have to fall, or companies’ profits have to rise.
That raises the stakes for the upcoming earnings reporting season for U.S. companies, which will report how much profit they made over the summer. JPMorgan Chase, Johnson & Johnson and United Airlines are some of the big names on the calendar for this week.
Fastenal fell 4.5%, marking one of the biggest losses in the S&P 500, after reporting earnings for the latest quarter that were slightly weaker than analysts expected.
In foreign stock markets, indexes were mixed in Europe, after sharp losses in Asia.
Share prices fell 1.5% in Hong Kong and 0.2% in Shanghai. China reported that its global exports rose 8.3% in September from a year earlier, the strongest growth in six months and further evidence that its manufacturers are shifting sales from the US to other markets.
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