NEW YORK (AP) — Wall Street experienced a significant rebound on Monday as U.S. stocks surged following President Donald Trump’s declaration that “ it will all be fine,” just days after he shocked investors by proposing steep tariff hikes on China.
The S&P 500 soared by 1.6%, marking its strongest performance since May and recouping over half of its Friday losses. The Dow Jones Industrial Average rose by 587 points or 1.3%, while the Nasdaq composite surged 2.2%.
“Don’t worry about China,” Trump stated on his social media platform on Sunday. He emphasized that China’s leader, Xi Jinping, “doesn’t want a Depression for his country, and neither do I. The U.S.A. is here to support China, not to harm it!!!”
This statement marked a stark contrast to Trump’s previous rhetoric on Friday, when the S&P 500 suffered its steepest decline since April after he criticized China, calling it “ a moral disgrace in its dealings with other nations.”
Trump highlighted “an extremely hostile letter” from China concerning limits on rare earth exports, which are essential for manufacturing everything from consumer electronics to jet engines. At that time, Trump suggested he could impose an additional 100% tax on imports from China starting November 1.
In response, China called on the U.S. to settle disputes through negotiation rather than threats. The Commerce Ministry stated, “We do not seek a tariff war, but we are ready for one.”
Shortly after, Trump shared a more conciliatory message regarding China on Truth Social. This unexpected shift in tone, occurring right before the market opened, raised optimism that the two largest economies could work towards ensuring the smooth continuation of global trade.
The fluctuations in the market mirrored its previous volatile patterns from April. At that time, Trump shocked the market with his “Liberation Day” declaration of global tariffs, only to later backtrack on numerous cases to allow for negotiations with other nations.
If history repeats itself, this situation could lead to a gradual recovery extending into 2026, especially if trade tensions and uncertainty ease, according to Morgan Stanley strategists led by Michael Wilson.
Nonetheless, it is worth noting that the U.S. stock market may have been due for a correction. Criticism had mounted regarding inflated prices after a staggering 35% surge in the S&P 500 since April’s lows. The index, which influences many 401(k) accounts, remains close to its record high reached last week.
Trump’s concession on tariffs has been a key factor in the stock market’s upward momentum since April, alongside anticipations of several interest rate cuts by the Federal Reserve to stimulate the economy.
