United States equity-index futures jumped in early trading and oil rebounded as US President Donald Trump assured that relations with China “will be fine”.
S&P 500 contracts climbed almost 1% after the benchmark slumped 2.7% on Friday, its biggest loss in six months, according to s Bloomberg report.
Markets had created on October 10 after Donald Trump said he would impose an additional 100 per cent tariff on all Chinese goods from November 1, and limit US software exports.
What did Donald Trump assure?
In a post on Truth Social, Donald Trump said, “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it.”
Further, in an interview with Fox New on the weekend, US Vice President JD Vance said they will negotiate if China is “willing to be reasonable,” but he felt that the US has “far more cards” if Beijing does not come to the table.
Markets update: How have goal markets reacted?
Australian stocks opened lower while futures for Hong Kong fell. Japan’s markets are closed for a holiday. Oil rose more than 1% following two days of losses. Treasury 10-year futures dropped.
Global equities took a hit on Friday after Trump warned of a “massive” hike in levies on Chinese goods, later specifying an additional 100% tariff starting Nov. 1 alongside export controls on critical software. He spoke out after Beijing earlier unveiled curbs on the export of rare earths.
Big downward moves in risky assets have been a rarity of late, which may itself be a factor in the jarring reaction to trade tensions. Since the tariff-fueled meltdown in April, the S&P 500 has surged on optimism about AI and hopes for Federal Reserve rate cuts. The gauge is trading near one of its highest valuations in 25 years — leaving a thin cushion for bad news.
“It doesn’t look like a replay of April, rather more like a back-and-forth pre-trade negotiation phase before the November deadline of the US-China truce,” said Anna Wu, a cross-asset strategist at Van Eck Associates Corp. “Markets are pricing in to a certain degree of overselling on Friday, so retrieving from the low.”
The administration signaled openness Sunday to a deal with China with Trump hinting at a possible off-ramp for Chinese President Xi Jinping while issuing a veiled threat that a full trade war would wound China.
Remarks from Trump and Vice President JD Vance suggest that the US wants to keep up the pressure on China to reverse its most recent trade moves, while trying to reassure spooked markets that a tit-for-tat escalation isn’t inevitable.
Chinese equities meanwhile have been one of the world’s best performers. Hong Kong’s Hang Seng Index has climbed 31% in 2025 as they benefited from the trade truce with the US in addition to optimism over the country’s growing heft in AI. Alibaba Group Holding Ltd. has surged more than 100%, with Tencent Holdings Ltd. up almost 60%.
Whether the truce holds or collapses remains unknown, with Trump signaling Friday he could retreat from the tariff escalation if Beijing backed down from its plan to limit rare earth exports. China urged further negotiations to resolve outstanding trade issues, though said it won’t hesitate to retaliate should Washington persist in its measures. Trump and Xi are also due to meet later this month.
The uncertainty may limit the impact on Chinese equities, according to Hao Zhou, chief economist at Guotai Junan Hong Kong Ltd.
“I expect China’s markets to fall initially and then rebound with caution,” he said. “There are a lot of questions left unanswered.”
Some of the main moves in markets:
- S&P 500 futures rose 0.9% as of 8:14 a.m. Tokyo time
- Hang Seng futures fell 5%
- Australia’s S&P/ASX 200 fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.1% to $1.1604
- The Japanese yen fell 0.5% to 151.93 per dollar
- The offshore yuan was little changed at 7.1391 per dollar
Cryptocurrencies
- Bitcoin was little changed at $114,994.73
- Ether fell 0.2% to $4,132.31
Commodities
- West Texas Intermediate crude rose 0.9% to $59.45 a barrel
- Spot gold rose 0.7% to $4,045.46 an ounce
(With inputs from Bloomberg)
