Wall Street skews higher after Trump softens his criticism of China

NEW YORK (AP) — And backup goes to Wall Street. US stocks rose on Monday after President Donald Trump’s comments. Everything will be fine“, just days after that It sent the market reeling by Threatening to impose much higher tariffs on China.

The S&P 500 jumped 1.6% on its best day since May and regained just over half of its decline from Friday. The Dow Jones Industrial Average rose 587 points, or 1.3%, and the Nasdaq Composite Index jumped 2.2%.

“Don’t worry about China,” Trump said on his social media platform on Sunday. He also said that Chinese leader Xi Jinping “doesn’t want a depression for his country, and neither do I. The United States wants to help China, not hurt it!!!”

It was a sharp reversal from the anger Trump showed on Friday, when the S&P 500 fell to its worst drop since April after he accused China of “ Moral disgrace in dealing with other nations.”

Trump pointed to a “very hostile letter” from China describing the restrictions on trade Rare earth exportsThey are materials used in the manufacture of everything from personal electronic devices to jet engines. Trump said at the time that he might impose an additional 100% tax on imports from China starting November 1.

For her part, China urged the United States To resolve disputes through negotiations rather than threats. “We do not want a tariff war, but we are not afraid of it,” the Commerce Ministry said in a statement posted online.

Hours later, Trump posted his less confrontational rant about China on Truth Social. The decline in anger, which also came before the start of trading on Wall Street, raised hopes that the world’s two largest economies could find a way to allow global trade to continue smoothly.

Both downward and upward movements reverberated in the market Manic swings during April. That’s when Trump shocked investors by declaring a worldwide “Emancipation Day.” Definitionsjust for Eventually he relents on a lot To give time to negotiate trade deals with other countries.

If this time it ends up similarly, perhaps even after a sharp drop in stock prices, easing trade tensions and uncertainty could allow a sustained recovery to continue into 2026, according to Morgan Stanley strategists led by Michael Wilson.

To be sure, the US stock market may have been set for a decline. It was already facing criticism that prices had skyrocketed after the S&P 500’s 35% surge from its April low. The index, which determines the movements of many 401(k) accounts, remains near its benchmark Highest level ever Set last week.

Not only has Trump’s rollback of tariffs helped stocks rise since April, but so has expectations of several interest rate cuts by the Federal Reserve to help the economy.

Critics say The market seems very expensive Now that prices are rising much faster than corporate profits. Fears are It is particularly high around companies in the artificial intelligence industryWhere pessimists hear echoes of the dot-com bubble that burst in 2000.

Broadcom shares jumped 9.9% for one of the biggest gains on Monday in the S&P 500 after announcing the cooperation with… OpenAI. Broadcom will help develop and deploy custom AI accelerators that will be designed by the maker of ChatGPT.

For stocks to generally appear less expensive, either prices need to fall, or corporate profits need to rise.

This raises the stakes for the upcoming earnings reporting season, as major US companies line up to announce how much they earned over the summer. JPMorgan Chase, Johnson & Johnson, and United Airlines are among the big names on the calendar this coming week.

Fastenal shares fell 7.5%, incurring the largest loss in the S&P 500 index, after the manufacturer of fastening tools and safety supplies announced fourth-quarter profits that were slightly weaker than analysts expected.

Overall, the Standard & Poor’s 500 index rose 102.21 points to 6,654.72 points. The Dow Jones Industrial Average rose 587.98 to 46,067.68, and the Nasdaq Composite rose 490.18 to 22,694.61.

At Bank of America, strategist Savita Subramanian is optimistic that S&P 500 companies can post greater overall profits than analysts had expected. Along with reports showing the resilience of the US economy, a global research report issued by Bank of America also pointed out how the weakness of the US dollar against other currencies boosts the value of major US companies’ sales made abroad.

In overseas stock markets, indexes rose in Europe after losses in Asia, which had the first opportunity to respond to Trump’s threat on Friday to impose additional tariffs on China.

Shares fell 1.5% in Hong Kong and 0.2% in Shanghai.

You mentioned China 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 United States to other markets.

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AP Business Writers Matt Ott and Ellen Kurtenbach contributed.