Global Markets Rebound as Trump Eases Tariff Threats — Futures Surge Amid Hopes of US-China Thaw

Global Markets Breathe Easy as Trump Dials Back China Tariff Threats, Sparking Futures Rally

In a dramatic pivot that soothed rattled investors worldwide, global financial markets staged a tentative recovery on Monday, October 13, 2025, after former U.S. President Donald Trump softened his fiery rhetoric on imposing crippling 100% tariffs on Chinese imports. The unexpected de-escalation, signaled through a Sunday evening Truth Social post where Trump declared, “Don’t worry about China, it will all be fine!” followed by assurances to reporters of a “great relationship” with President Xi Jinping, quelled the panic that had erased $2 trillion in U.S. equity value during Friday’s brutal sell-off. U.S. stock futures, a bellwether for market sentiment, roared back to life: as of 9:30 p.m. ET Sunday, S&P 500 futures (ES=F) surged 1.04%, Nasdaq 100 futures (NQ=F) jumped 1.34%, and Dow Jones Industrial Average futures (YM=F) climbed 0.8%, signaling a robust Wall Street open. The SPDR S&P 500 ETF Trust (SPY), a key market barometer, closed at $662.112 after a 2.7% plunge last week, as shown in the finance card above, reflecting the market’s sensitivity to trade war tremors. This rebound, however, comes with a cautious undertone, as traders weigh whether Trump’s olive branch heralds genuine diplomacy or a fleeting pause in the U.S.-China economic tug-of-war.

The catalyst for Friday’s market rout was Trump’s bombshell announcement of additional tariffs—set to raise duties on Chinese goods to 130% from November 1—in retaliation for Beijing’s tightened grip on rare earth exports, which dominate 80% of U.S. supply for semiconductors and EV batteries. Asian markets, caught in the crosshairs, bore the brunt: Hong Kong’s Hang Seng Index cratered 3.2%, China’s CSI 300 slid 1.8%, and Japan’s Nikkei 225 shed 1.7%, with tech giants like TSMC and Samsung hemorrhaging value amid fears of supply chain chaos. Monday’s mood, however, shifted as Trump’s softer tone, echoed by Vice President J.D. Vance’s call for Beijing to “choose reason,” hinted at a potential diplomatic thaw. China’s commerce ministry, while vowing “resolute measures” if tariffs proceed, left room for talks, noting it “does not want a tariff war but is not afraid of one.” This delicate dance fueled a stabilization in Asian indices: the Hang Seng clawed back 0.9%, Shanghai’s Composite edged up 0.5%, and Nikkei futures ticked higher despite Japan’s holiday closure, reflecting guarded optimism for renewed U.S.-China dialogue.

Analysts see this as a classic Trump playbook—bluster followed by backpedaling—dubbed the “TACO trade” (Trump Always Caves Out) by some, with Wedbush’s Daniel Ives calling it a “buying opportunity” for tech stocks battered by Friday’s 3.5% Nasdaq plunge. Yet, the relief is tempered by looming uncertainties: the November 1 tariff deadline, a U.S. government shutdown threatening federal paychecks by October 15, and China’s reported 27% drop in U.S. exports in September, as Beijing pivots to Brazil and Argentina for soybeans. ING’s Inga Fechner warns that sustained tariffs could inflate U.S. consumer prices by 2-3% and disrupt $500 billion in trade, while JPMorgan flags a 10-15% hit to Asian earnings if the standoff persists. Posts on X capture the polarized sentiment: some cheer Trump’s deal-making flair, while others, like @1drcole, lament the $2.6 billion loss to U.S. farmers from China’s retaliatory tariffs.

In conclusion the Street braces for a pivotal week—earnings from JPMorgan, Goldman Sachs, and Citigroup loom, with a projected 6% profit rise—investors are hedging bets. The SPY’s year-to-date climb of 9.4% (from $605.04 in October 2024 to $662.112, per the finance card) underscores resilience, but Friday’s 878-point Dow drop lingers as a cautionary tale. Trump’s hint at an “eternity” before November 1 offers hope, yet Beijing’s rare earth leverage and port fee threats keep markets on edge. For now, the futures rally—bolstered by gold’s 2% and Bitcoin’s 3% weekend gains—signals a fragile reprieve. Will this mark a turning point toward detente, or is it a mere intermission in a high-stakes economic drama? Traders, from Hong Kong’s neon-lit towers to New York’s frenetic floors, are holding their breath for clarity.

News source:www. Reuters. Com