Wall Street veers upward after Trump softens his criticism of China
[October 14, 2025] By
STAN CHOE
NEW YORK (AP) — And back up goes Wall Street. U.S. stocks rallied Monday
after President Donald Trump said ” it will all be fine,” just days
after he sent the market reeling by threatening much higher tariffs on
China.
The S&P 500 jumped 1.6% in its best day since May and recovered just
over half its drop from Friday. The Dow Jones Industrial Average climbed
587 points, or 1.3%, and the Nasdaq composite leaped 2.2%.
“Don’t worry about China,” Trump said on his social media platform
Sunday. He also said that China’s leader, Xi Jinping, “doesn’t want
Depression for his country, and neither do I. The U.S.A. wants to help
China, not hurt it!!!”
It was a sharp turnaround from the anger Trump displayed on Friday, when
the S&P 500 tumbled to its worst drop since April after he accused China
of “ a moral disgrace in dealing with other Nations.”
Trump pointed to “an extremely hostile letter” from China describing
curbs to exports of rare earths, which are materials used in the
manufacturing of everything from personal electronics to jet engines.
Trump said at the time that he may place an additional 100% tax on
imports from China starting on Nov. 1.
For its part, China urged the United States to resolve differences
through negotiations instead of threats. “We do not want a tariff war
but we are not afraid of one,” the Commerce Ministry said in a statement
posted online.
Hours later, Trump posted his less confrontational talk about China on
Truth Social. The backtrack in anger, which also came before trading
began on Wall Street, raised hopes that the world’s two largest
economies could find a way to allow global trade to continue smoothly.
The down-and-up moves for the market echoed its manic swings during
April. That’s when Trump shocked investors with his “Liberation Day”
announcement of worldwide tariffs, only to eventually relent on many to
give time to negotiate trade deals with other countries.

If this time ends up similarly, potentially even after a sharp drop for
stock prices, subsiding trade tensions and uncertainty could allow for a
rolling recovery to continue into 2026, according to Morgan Stanley
strategists led by Michael Wilson.
To be sure, the U.S. stock market may have been primed for a drop. It
was already facing criticism that prices had shot too high following a
torrid 35% run for the S&P 500 from a low in April. The index, which
dictates the movements for many 401(k) accounts, is still near its
all-time high set last week.
Not only did Trump’s backdown from tariffs help stocks soar since April,
so did expectations for several cuts to interest rates by the Federal
Reserve to help the economy.
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Traders James Bodner, foreground, and Chris Lagana work on the floor
of the New York Stock Exchange, Monday, Oct. 13, 2025. (AP
Photo/Richard Drew)
 Critics say the market looks too
expensive now after prices rose much faster than corporate profits.
Worries are particularly high about companies in the
artificial-intelligence industry, where pessimists hear echoes of
the 2000 dot-com bubble that imploded.
Broadcom jumped 9.9% for one of Monday’s biggest gains in the S&P
500 after announcing a collaboration with OpenAI. Broadcom will help
develop and deploy custom AI accelerators that the maker of ChatGPT
will design.
For stocks broadly to look less expensive, either prices need to
fall, or companies’ profits need to rise.
That’s raising the stakes for the upcoming earnings reporting
season, with big U.S. companies lined up to say how much profit they
made during the summer. JPMorgan Chase, Johnson & Johnson and United
Airlines are some of the big names on the calendar this coming week.
Fastenal tumbled 7.5% for the largest loss in the S&P 500 after the
maker of fasteners and safety supplies reported a profit for the
latest quarter that was slightly weaker than analysts expected.
All told, the S&P 500 rose 102.21 points to 6,654.72. The Dow Jones
Industrial Average climbed 587.98 to 46,067.68, and the Nasdaq
composite rallied 490.18 to 22,694.61.
At Bank of America, strategist Savita Subramanian is optimistic that
S&P 500 companies can deliver a bigger overall profit than analysts
expected. Besides reports showing a resilient U.S. economy, she also
pointed in a BofA Global Research report to how the U.S. dollar’s
weakening against other currencies boosts the value of big U.S.
companies’ sales made overseas.
In stock markets abroad, indexes edged higher in Europe following
losses in Asia, which had their first opportunity to react to
Trump’s threat from Friday of additional tariffs on China.
Stocks fell 1.5% in Hong Kong and 0.2% in Shanghai.
China reported its global exports rose 8.3% in September from a year
earlier, the strongest growth in six months and further evidence
that its manufacturers are shifting sales from the United States to
other markets.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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