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U.S. Stocks Rebound as Trump Calms U.S.-China Trade Tensions

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US Stock Futures Fall with Economic Data and Tech Earnings in the Spotlight


U.S. stocks bounced back sharply on Monday after President Donald Trump reassured investors that the ongoing U.S.-China trade dispute “will all be fine.” His comments eased fears of further escalation following last week’s tariff threats.

U.S. Stocks Rebound as Trump Calms U.S.-China Trade Tensions

Market Rally After Trade Optimism

The Dow Jones Industrial Average climbed 621 points, or 1.4%, reclaiming about 70% of the losses from Friday’s sell-off. The S&P 500 and Nasdaq Composite also closed higher, supported by optimism that dialogue between Washington and Beijing will continue.

Treasury Secretary Scott Bessent reinforced Trump’s comments, saying that while China “miscalculated,” both sides are still open to negotiation.

“The U.S. has de-escalated the situation and is engaging directly with China through diplomacy and high-level meetings,” Bessent said on X.

Rare Earth Restrictions Trigger Market Reaction

The recovery followed a sharp downturn last week when China announced restrictions on rare earth exports, materials vital for U.S. defense and technology manufacturing. In response, Trump threatened to impose 100% tariffs on Chinese goods starting November 1, potentially raising effective rates on some products to 130%.

China’s Foreign Ministry urged restraint, calling new tariffs “not the right way to engage.” Spokesman Lin Jian stated that both nations should “resolve differences through dialogue based on mutual respect and benefit.”

Trump Softens Stance Toward Beijing

Over the weekend, Trump sought to ease market jitters, posting on Truth Social:

“Don’t worry about China, it will all be fine! President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I.”

Vice President J.D. Vance added that it will be a “delicate dance” between both countries, emphasizing that “if China responds reasonably, the U.S. will do the same.”

Trade war tensions return: what it means for stocks and global markets.

Economic Impact on American Farmers

The trade dispute has already impacted U.S. agriculture, especially soybean exports. China’s suspension of soybean purchases has hurt farmers across the Midwest.

American Soybean Association (ASA) President Caleb Ragland said:

“Trade wars harm everyone. These developments are disappointing as farmers face a financial crisis. We hope talks can resume soon.”

What’s Next for the U.S.-China Trade Outlook

Trump is expected to meet Chinese President Xi Jinping at a summit in South Korea later this month, although the meeting remains uncertain. Treasury Secretary Bessent said there is still “time to talk things out” before the November 1 tariff deadline, adding that both leaders “share a good working relationship.”

For now, markets appear cautiously optimistic that diplomacy—not escalation—will guide the next chapter in U.S.-China relations.

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