US stocks rebound after Donald Trump takes softer tone on China

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Stock markets rebounded Monday after Donald Trump appeared to back away from his threat to impose punitive new tariffs on Chinese imports, saying the United States “wants to help China, not hurt China!!!”

The S&P 500 closed 1.6 percent higher, partially recovering after Trump triggered a 2.7 percent drop on Friday — the Wall Street index’s biggest single-day selloff since April — by threatening to impose additional 100 percent tariffs on China.

The Nasdaq Composite, which was dominated by technology stocks, rose 2.2 percent, supported by a 9.9 percent jump in shares of semiconductor giant Broadcom after it agreed to sell 10 gigawatts of chips to OpenAI. Shares of chip maker giant Nvidia rose 2.8 percent.

The Nasdaq fell 3.6 percent on Friday as investors worried that the threat of tariffs could reignite the global trade war that rocked markets earlier this year. Trump also indicated that he may cancel a scheduled summit with president Xi Jinping later this month, in response to a package of export controls on rare earths unveiled by Beijing last week.

The moves came after Trump wrote on Sunday in a post on his Truth Social platform: “The well-respected President Xi has had a bad moment. He does not want a depression for his country, and neither do I. The United States wants to help China, not hurt it!!!”

Analysts said Monday’s reaction showed investors were optimistic that much higher tariffs could be avoided.

“The past 72 hours show that there is still room for a negotiated agreement or just an extension of the current situation,” said Jeffrey Yeo, chief strategist at BNY in London.

Markets in Europe, which saw smaller declines on Friday, also stabilized. The Stoxx Europe 600 index closed 0.4 percent higher. The French CAC 40 index, the German DAX index, and the British FTSE 100 index rose slightly.

“This is the kind of decline we have been waiting for” as a buy signal, HSBC analysts said. “Basically, not much has changed,” they added, citing the remaining time for negotiations between the United States and China and the steps already taken by major companies to ease tariffs.

Asian stocks, which closed before Trump issued his threats on Friday, fell sharply on Monday despite the US president’s more lenient tone. Hong Kong’s Hang Seng fell 1.5 percent, Japan’s Topix fell 1.9 percent, and Taiwan’s TAEX lost 1.4 percent. The CSI 300 index in mainland China closed 0.5 percent lower.

“Context matters,” said Aaron Say, chief multi-asset strategist at Pictet. “Investors were already nervous about market valuations, and the AI ​​bubble – when we trade at these valuation levels, it’s fair to have a knee-jerk reaction.”

Bom Kee Soon, chief regional economist at Barclays Bank in Singapore, said economies in Asia were “among the most exposed to trade and China uncertainties compared to other regions.”

These moves came after Beijing criticized Trump’s plan to impose additional tariffs and threatened new countermeasures on Sunday. “China’s position on tariff wars has been consistent: We don’t want to fight, but we’re not afraid to fight,” the Commerce Department said.

The price of gold, often seen as a haven asset, hit an all-time high of $4,107 an ounce, extending a rally in which the price has risen more than 50 percent this year.

Additional reporting by Ian Smith in London and George Steer in New York