Investors were placated after US treasury secretary Scott Bessent said on Monday that Trump is on track to meet Chinese leader Xi Jinping in late October as the two sides try to de-escalate trade tensions.
On Friday, Trump had threatened 100% tariffs on China from Nov 1 in response to China’s curbs on exports of rare earth elements. But by Sunday the US president sounded more conciliatory, posting on social media that the US did not want to hurt China.
“Investors at the end of last week were worried that there was potential escalation in tensions between the United States and China. It looks like this morning they’ve walked that back a little bit,” said Chris Zaccarelli, chief investment officer, Northlight Asset Management in Charlotte, North Carolina.
Zaccarelli also said Monday’s news that OpenAI has partnered with Broadcom to produce its first in-house artificial intelligence processors, “adds to the general enthusiasm around artificial intelligence and related industries.”
MSCI’s gauge of stocks across the globe rose 8.92 points, or 0.92%, to 981.17, regaining some ground lost in Friday’s more than 2% sell-off.
On Wall Street, the Dow Jones Industrial Average rose 587.98 points, or 1.29%, to 46,067.58. It had fallen 1.9% on Friday. The S&P 500 rose 102.21 points, or 1.56%, to 6,654.72 on Monday, after losing 2.7% in the prior session, and the Nasdaq Composite rose 490.18 points, or 2.21%, to 22,694.61 after falling more than 3% on Friday.
Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, noted some signs of remaining skepticism in the market as investors were still buying gold.
“Gold is the fear trade. Even with Trump backing away from the 100% tariffs on China, there is fear out there and gold is traditionally the place to hide,” he said. Also, BofA commodities analysts said in a note on Monday that they had raised their forecast for gold to US$5,000 an ounce for next year from US$4,400.
Spot gold breached US$4,100 per ounce for the first time and was last up 2.24% at US$4,107.17 an ounce. US gold futures rose 3.11% to US$4,099.50 an ounce.
Earlier the pan-European STOXX index had closed up 0.44% although France remained in the spotlight with reappointed Prime Minister Sebastien Lecornu facing pressure to get a budget deal approved.
In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.22% to 99.27. The euro was down 0.44% at US$1.1567.
Against the Japanese yen, the dollar strengthened 0.77% to 152.32. Japanese markets have had their own problems, with the ascension of new ruling party leader Sanae Takaichi to prime minister now in doubt. That contributed to a sharp rebound in the yen and a 5% dive in Nikkei futures on Friday. Japan’s Nikkei was closed on Monday for a holiday.
In cryptocurrencies, bitcoin gained 0.71% to US$115,874.58. It had fallen 5.6% on Friday.
US bond markets were closed on Monday for the Columbus Day/Indigenous Peoples’ Day holiday.
Oil prices rose on Monday after hitting five-month lows on Friday, as investors focused on the easing of US-China trade tensions and assurances that Trump will meet his counterpart later this month.
US crude settled up 1% or 59 cents at US$59.49 a barrel and Brent finished at US$63.32 per barrel, up 0.94% or 59 cents on the day.
In the week ahead, investors will be monitoring the earnings season kick-off with major US banks reporting, including JPMorgan, Goldman Sachs, Wells Fargo and Citigroup.
S&P 500 companies overall are expected to have increased earnings by 8.8% in the third quarter from a year earlier, according to LSEG IBES, and strong results will be needed to justify the market’s high valuations.