Financial Markets                      10/13 15:31

   

   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.

   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.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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