U.S. Stocks Rally as Trump Softens Tone on China Trade Dispute
U.S. stocks surged on Monday, as investors welcomed a more conciliatory tone from President Donald Trump following last week’s escalation of U.S.-China trade tensions.
By 10:24 ET (14:24 GMT), the S&P 500 had jumped 82 points (1.3%), the Nasdaq Composite climbed 392 points (1.8%), and the Dow Jones Industrial Average advanced 431 points (1.0%).
Markets had tumbled on Friday after Trump’s social media posts reignited fears of a new trade war between the world’s two largest economies. The sell-off followed China’s decision to expand export controls on rare earth materials, a key input for multiple industries. Trump responded by threatening tariffs of up to 100% on Chinese imports and hinted at export restrictions on U.S. software by November 1.
He also cast doubt on a planned meeting with Chinese President Xi Jinping at the upcoming South Korea summit, though officials later confirmed the event remains on the schedule.
Over the weekend, however, Trump adopted a softer stance, saying that “everything will be fine” and that Washington was not looking to hurt China, helping to ease market jitters.
Trade Optimism and AI Momentum Lift Markets
Analysts at Capital Economics said the dispute “could still blow over if cool heads prevail,” noting that the Trump-Xi meeting could provide “an off-ramp” for both sides. Still, they warned that prolonged brinkmanship could deepen the economic rift between the two powers.
In addition to trade headlines, investors are watching the continued AI boom and expectations of lower interest rates, which have both supported Wall Street’s strong valuations.
Broadcom shares rose more than 6% after announcing a multi-year collaboration with OpenAI to develop and deploy 10 gigawatts of custom AI accelerators. The deal, which runs through 2029, will integrate Broadcom’s Ethernet and networking systems with OpenAI’s next-generation chip designs.
Meanwhile, Oracle is set to host its AI conference in Las Vegas this week, and major semiconductor firms such as ASML and TSMC will report earnings in the coming days. Big bank earnings will also mark the start of the corporate reporting season, with investors closely monitoring executives’ economic commentary amid the ongoing U.S. government shutdown.
Gold Surges to Record Highs as Investors Seek Safety
Gold prices hit new all-time highs on Monday, fueled by renewed trade tensions and safe-haven demand. Spot gold climbed 1.9% to $4,095.09 per ounce, while U.S. gold futures jumped 2.9% to $4,115.40 per ounce. Silver also reached a record high, mirroring the strong rally in precious metals.
Analysts said the surge reflects heightened market uncertainty after Trump’s tariff threats. Although his milder remarks helped calm sentiment, traders remain wary of policy volatility from the White House.
Oil Rebounds from Five-Month Lows
In energy markets, oil prices rebounded after falling to their lowest levels since May. Brent crude rose 1.5% to $63.65 per barrel, and West Texas Intermediate (WTI) gained 1.8% to $59.97 per barrel by 10:28 ET.
Both benchmarks had dropped over 4% on Friday, pressured by trade fears and easing geopolitical tensions in the Middle East. Analysts noted that a fragile ceasefire in Gaza helped cool supply concerns.
According to media reports, Hamas released the first group of Israeli hostages as part of a U.S.-brokered ceasefire agreement, marking a key step toward ending years of conflict in the region.
