US stock futures jump as Trump seeks to calm trade tensions with China

Investing.com-- U.S. stock futures rose sharply on Sunday evening, recovering some of last week’s steep losses, after President Donald Trump struck a reassuring tone on trade ties with China, easing fears of an escalating trade war between the world’s two largest economies.

At 19:43 ET (23:43 GMT), S&P 500 Futures climbed 1.1% 6,665.50, while Dow Jones Futures gained 0.7% to 46,027.0 and Nasdaq 100 Futures surged 1.6% 24,781.0 points.

Trump says ’don’t worry about China’

The rebound followed a sharp sell-off on Friday when Wall Street suffered its worst single-day decline in six months.

Major U.S. indexes tumbled on Friday after Trump announced plans to impose an additional 100% tariff on all imports from China, along with new export controls on certain U.S.-made software deemed critical to national security.

The Dow Jones Industrial Average fell 1.9%, the S&P 500 shed 2.7%, and the NASDAQ Composite slid 3.6%, with technology and chip shares leading declines.

Trump’s announcement came after Beijing moved to further tighten its rules for rare earths exports. It jolted markets already wary of renewed trade hostilities.

But on Sunday evening, Trump appeared to walk back the tone of confrontation, posting on social media, “Don’t worry about China, it will all be fine.” He added that "the U.S.A. wants to help China, not hurt it", hinting negotiations could continue.

The comments appeared to soothe investor nerves and fuel bargain-hunting in futures trading, though sentiment remained fragile.

China’s Commerce Ministry, however, warned over the weekend that it would take all necessary measures if Washington follows through with its tariff plans, adding it was "not afraid" of a possible trade war.

US govt shutdown drags on; earnings season starts

Still, the optimism was tempered by a prolonged U.S. government shutdown that entered its second week with no clear path to resolution. It has halted the release of key economic reports from federal agencies, leaving the Federal Reserve with a thinning data set to inform its October 28-29 meeting.

Meanwhile, earnings season will begin this week, led by major U.S. banks. Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), and Goldman Sachs (NYSE:GS) are due to report on Tuesday, followed by Bank of America Corp (NYSE:BAC) and Morgan Stanley (NYSE:MS) on Wednesday.