After Friday’s fright, tech stocks roared back to life on Monday, leading a powerful Wall Street rebound that saw the Nasdaq surge 2.2%, the S&P 500 climb 1.6% and the Dow add 1.3%. The bounce came after President Trump attempted to calm nerves over his threat of 100% tariffs on Chinese imports, assuring followers that “it will all be fine!”
The about-face erased some of last week’s $2 trillion market rout, helping risk appetite recover as investors bet that Washington and Beijing will ultimately pull back from the brink. China’s latest export data, which beat expectations, also helped steady sentiment.
Artificial intelligence stocks once again stole the spotlight after Broadcom jumped more than 10% on news of a new AI partnership with OpenAI, reinforcing hopes that the sector’s growth story remains intact despite wider geopolitical jitters.
Traders are now looking ahead to a packed week: Federal Reserve chair Jerome Powell speaks Tuesday, with investors searching for clues on future rate cuts, while earnings season kicks off with results from Wall Street’s biggest banks.
With tariffs toned down, AI hype heating up and central bankers back in focus, markets seem—for now—to have rediscovered their nerve.
9.47 am: Powerful start
The Nasdaq led the pack as the jitters from Friday's tariff-induced panic eased. The tech-heavy index was up 1.6%, while the S&P and Dow rose 1% and 0.9% respectively.
8.00 am: Positive start predicted
Investors have bet on Wall Street stocks making a sharp comeback on Monday after a sell-off at the end of last week sparked by the reignition of US-China trade tensions.
Nasdaq 100 futures were up 1.8%, while S&P 500 futures were up 1.2%, while the Dow Jones was seen opening up 0.8%.
On Friday, after China ramped up restrictions on rare earth elements exports, President Trump threatened a "massive" tariff increase.
This led to the Nasdaq plunging 3.6%, the S&P 2.7% and the Dow Jones 1.9%.
However, on Sunday, he posted on social media: "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 USA wants to help China, not hurt it".
Analysts said the US President was de-escalating the latest round of the trade war.
Furthermore, on Monday morning, Treasury Secretary Scott Bessent told Fox News that Trump's Friday social media post "turned the tables" and that China "made a miscalculation" with its threat on rare earth minerals.
He suggested that officials were carrying out working level talks this week, and looking to agree a time for talks between Presidents Trump and Xi.
Bessent said 100% tariffs on China "doesn't have to happen" and the US-China "relationship is good."
On the US federal government shutdown, Bessent said it was starting to impact the nation's economy, as the closure entered its 13th day.
US bond markets are closed today for the Columbus Day holiday, but equities will trade.