Stock market today: Dow futures jump 300 points after Trump says ‘Don’t worry about China’
Investors are eyeing a stock market rebound after the trade war erupted on Friday, sending the S&P 500 index to its worst loss since April.
On Sunday, president Donald Trump sought to calm nerves in a post on Truth Social, after announcing on Friday that he would impose an additional 100% tariff on China and limit US software exports.
“Don’t worry about China, everything will be fine!” books. “The well-respected President Xi has had a bad moment. He doesn’t want his country to suffer a depression, and neither do I. The United States wants to help China, not hurt it!!!”
Meanwhile, Vice President J.D. Vance told Fox News Sunday morning futureHe said the United States was willing to be rational if China was, though he insisted that Trump had the upper hand with “a lot more cards” than Beijing did.
The shift in tone contrasts with Trump’s fiery rhetoric on Friday when he criticized China over new export controls on rare earth elements, which are important inputs across a range of industries.
“Market participants appear to be leaning into the TACO trade again, fueled not only by what we’ve seen in the recent past, but also by conciliatory statements over the weekend from both President Trump and Vice President Vance, suggesting that Friday’s announcement of additional 100% tariffs on Chinese imports is likely to be more than just a negotiation tactic,” said Michael Brown, chief research strategist. At Pepperstone, in a note on Sunday.
Futures contracts linked to the Dow Jones Industrial Average rose 344 points, or 0.75%. S&P 500 futures rose 0.94%, and Nasdaq futures jumped 1.2%.
The yield on the 10-year Treasury note fell 8.9 basis points to 4.059%. The US dollar rose by 0.23% against the euro and by 0.65% against the yen. Gold rose 0.85 percent to $4,034.40 an ounce. US oil futures rose 0.92% to $59.44 a barrel, and Brent crude rose 1% to $63.35.
Trump had previously imposed 145% tariffs on China, then suspended them to allow negotiations to take place. A similar pattern has played out with other trading partners like the European Union, prompting Wall Street to dismiss the extreme threats of a “taco” trade (Trump always evades).
Brown said Trump’s new tariffs on China, which will take effect on November 1 and will bring the total level to 130%, appear to be another example of an “escalate to de-escalate” strategy.
“Assuming this is another ‘taco’ situation, and some clarity is gained on this front before too long, this will likely prove to be another decline in the stock that should be viewed as a buying opportunity, with the path of least resistance continuing to lead higher, albeit in a somewhat choppy fashion,” he added.
Meanwhile, Brown predicted that the Fed’s shift to lower interest rates amid strong economic growth will continue to strengthen the dollar, which will likely shrug off tariff threats.
Likewise, Ed Yardeni, president of Yardeni Research, a market veteran, sees the United States and China as falling off a cliff.
“If neither side blinks, the US and Chinese economies will lead the global economy into a deep recession, if not a depression,” he wrote in a note on Sunday. “But we expect both sides to back down very soon given the very negative consequences of the trade war between the world’s two largest economies.”
For its part, Beijing has remained defiant, with the Commerce Ministry saying on Sunday that China does not want a tariff war but also does not fear one. It also said that the export controls do not represent a ban on rare earth shipments but rather a sovereign right.
But China’s new rare earths export policy ups the ante beyond just another exchange in the trade war against the United States.
Dean Paul, who served as senior adviser in the White House Office of Science and Technology Policy earlier this year, wrote on X on Saturday that the policy gives Beijing the ability to “prevent any country on Earth from participating in the modern economy.”
Dali Yang, a political science professor at the University of Chicago, sounded a similar warning in a post on Sunday, saying the move represents a critical moment that reveals what a Chinese-led system might look like.
Looking beyond rare earths, they are those that leverage control over strategic materials and technologies to support global influence.
China is effectively saying: We control the arteries of high-tech civilization. The rest of the world now sees this message clearly, Yang wrote, and is striving to build new circulatory systems.
2025-10-12 22:09:00
