In a recent interview on Fox News' Sunday Morning Futures, President Donald Trump set a more conciliatory tone regarding U.S.-China relations, stating, “I’m not looking to destroy China.” This statement marks a significant shift from his previous remarks in August, where he claimed to possess “incredible cards” that could “destroy China” if he chose to act on them. This change in approach has implications for the stock market and investor sentiment.
Earlier this month, Trump announced an additional 100% tariff and implemented software restrictions targeting China, which has significant control over the global supply of rare earths. These measures, coupled with tighter export controls, pose threats to various industries within the U.S. economy. However, last week, the market experienced a sharp rebound following Trump’s reassurance, “Don’t worry about China,” indicating optimism that the situation would stabilize.
As the weekend approached, a similar pattern emerged. Futures tied to the Dow Jones Industrial Average rose by 54 points, or 0.12%. Meanwhile, the S&P 500 futures increased by 0.15%, and Nasdaq futures gained 0.20%. The yield on the 10-year Treasury remained steady at 4.011%. In foreign exchange markets, the U.S. dollar dipped 0.06% against the euro while climbing 0.14% against the yen. Additionally, gold prices surged 1% to $4,253.10 per ounce, signaling a shift in investor behavior amid ongoing uncertainty.
In the energy sector, U.S. oil futures held steady at $57.55 a barrel, while Brent crude remained virtually unchanged at $61.27. As investors look for clarity in the ongoing trade war, Treasury Secretary Scott Bessent is scheduled to meet with Chinese Vice Premier He Lifeng this week. This meeting is crucial as it precedes a highly anticipated summit between Trump and Chinese President Xi Jinping at the end of the month during a regional economic gathering in South Korea.
As the third-quarter earnings season ramps up, investors are eagerly awaiting results from major companies. Following impressive results from leading banks, tech giants are set to report their earnings. On Tuesday, Netflix and Texas Instruments will take the spotlight, while Tesla and IBM are scheduled for Wednesday, with Intel reporting on Thursday.
Despite the ongoing government shutdown, the Labor Department is expected to release the consumer price index report for September on Friday, after recalling key personnel. This report is vital for determining cost-of-living adjustments for Social Security. Economists predict a 0.4% monthly increase, consistent with August’s growth, and a 3.1% annual rise, an acceleration from the 2.9% increase observed in August.
