Dow Jones recovers nearly all of Friday's crash after Trump softens China stance

Benchmark indices on Wall Street rallied to recover most of Friday’s losses after US President Donald Trump softened his stance on China after Friday’s tirade on Truth Social.

The Dow Jones gained nearly 600 points, meaning two-thirds of Friday’s fall, while the S&P 500 and Nasdaq gained 1.5% and 2.2% respectively led by the beaten down technology names.

Oracle Corp. Nvidia, Broadcom contributed to the gains, with Broadcom rallying 10% on an OpenAI partnership, adding nearly $150 billion to its market cap.

Late Sunday evening, Donald Trump wrote on Truth Social that “everything will be fine with China and that the US does not want to hurt the country, but help them out.”
The post sent futures soaring, which reflected in the overall price action in regular trade as well.

The ongoing bull market in the US entered its fourth year on Sunday and according to LPL Financial’s research, the S&P 500 gains 12.8% on average in the fourth year of a bull market, if it has managed to make it till then. CFRA Research wrote that out of the 13 prior bull markets since the second World War, seven of them managed to enter the fourth year.

Other asset classes continued to stage a rebound as well. The US Dollar index was back at levels above 99, while Gold made a new record high above the $4,100 an ounce mark. Spot Silver prices also crossed its previous 1980 peak, hitting a new high of $52.5.

Despite the rebound, uncertainties continue to persist, in the form of earnings volatility, any potential deterioration in US-China relations, lack of clarity on whether the November 1 tariff threat still stands, and the ongoing US government shutdown, which has not shown any signs of ending anytime soon.

Earnings season begins in full force for Wall Street later today. Major banks such as JPMorgan, Wells Fargo, Goldman Sachs, CitiGroup report results this evening, with J&J and Domino’s also set to report numbers.