US stocks surged on Monday, clawing back much of Friday’s steep losses after President Donald Trump assured investors that trade relations with China “will all be fine.” His comments on Truth Social soothed fears of an escalating tariff war that had wiped out $2 trillion in market value late last week.
The Dow Jones Industrial Average jumped 588 points, or 1.3 per cent, to close at 46,067. The S&P 500 rose 1.6 per cent to 6,655, while the Nasdaq Composite climbed 2.2 per cent to 22,695 as technology shares led the recovery.
Trump signals softer tone on China
Trump described Chinese President Xi Jinping as “highly respected” and said neither country wanted a depression. Vice President JD Vance added that the US would negotiate if Beijing was “willing to be reasonable.”
Tech stocks drive the bounce
Oracle gained more than 5 per cent, Nvidia rose close to 3 per cent, and Broadcom surged almost 10 per cent after announcing a partnership with OpenAI to design artificial intelligence chips. The PHLX semiconductor index also rallied, with Micron Technology among the gainers. Nearly four in five S&P 500 components traded higher, and small-caps joined in, with the Russell 2000 up 2.8 per cent.
Earnings season on deck
The rebound comes as Wall Street gears up for a busy earnings week. JPMorgan, Citigroup, Goldman Sachs, Wells Fargo, Bank of America and Morgan Stanley will all report results beginning Tuesday. Bank of America expects a strong quarter, citing resilient data, positive guidance, and a weaker US dollar. Technology is forecast to drive overall earnings growth, with Nvidia alone projected to account for a quarter of the S&P’s third-quarter gains.
Other risks remain
Despite Monday’s rebound, volatility lingers. The US government shutdown continues into a new week with a payrolls deadline looming on October 15. The bond market was closed for the Columbus Day holiday, but attention will quickly shift to speeches from several Federal Reserve officials, including Chair Jerome Powell.
Australian outlook
The SPI 200 futures are pointing up 27 points, or 0.3 per cent, signalling a stronger open on Tuesday. Rio Tinto and Paladin Energy are due to post quarterly results, while the Reserve Bank will release minutes from its September board meeting. NAB’s business surveys are also expected.
