Stocks are rising after President Donald Trump’s calming remarks about China, following a surge in US tariffs. The S&P 500 fell to its worst loss since April on Friday due to the new trade war flare-up. However, on Sunday, Trump posted on Truth Social, saying “Don’t worry about China, it will all be fine!” and suggesting that the US is willing to be reasonable if China is too.
Vice President JD Vance also weighed in, stating that the US is willing to negotiate. This shift in tone has led market participants to believe that the tariffs may not be as severe as initially thought. Futures tied to the Dow Jones Industrial Average surged 382 points, and S&P 500 futures jumped 1.27%.
The rebound is also attributed to a drop in the yield on the 10-year Treasury, which tumbled 8.9 basis points to 4.059%. The US dollar rose against the euro and yen, while gold climbed to a new high of $4,057.50 per ounce.
Experts predict that if both sides can agree to negotiate, it may prevent a deep recession or depression. However, Beijing remains defiant, stating that China doesn’t want a tariff war but is not afraid of one. The new rare earth export policy by China has raised concerns about its growing influence in the global economy.
Overall, the market’s reaction suggests that investors are leaning towards a “TACO” (Trump always chickens out) trade scenario, where Trump’s threats are followed by concessions. This could lead to a buying opportunity for equities.
Source: https://fortune.com/2025/10/12/stock-market-today-dow-futures-trump-tariffs-china-trade-war-taco