Wall Street stocks rebound after Trump-fuelled slide / Photo: Brendan Smialowski - AFP/File
Wall Street stocks rebound after Trump-fuelled slide
Wall Street stocks rebounded Monday after heavy pre-weekend falls as US President Donald Trump reignited his trade war with China.
European stock markets were mixed in afternoon trading while Asia's leading stock markets began the week in the red as they caught up with Wall Street's sharp losses Friday.
Gold reached a fresh record high thanks to its status as a safe haven investment.
"Things have calmed down almost as dramatically as the flare up on Friday when Donald Trump threatened 100 percent tariffs on China," said City Index and FOREX.com analyst Fawad Razaqzada.
Trump wrote Friday on social media that he would impose an additional 100-percent tariff on China and threatened to cancel a meeting with Chinese counterpart Xi Jinping.
The US president had been to meet Xi at the Asia-Pacific Economic Cooperation (APEC) summit later this month, which was to be their first encounter since Trump returned to power in January.
The US president cited Beijing's export curbs on rare earth minerals used in a range of goods including smartphones, electric vehicles and military hardware.
Wall Street's Nasdaq index plunged 3.6 percent following Trump's comments, with investors also on edge over worries about a tech stock bubble following a recent surge on massive AI investments.
Beijing accused Washington of acting unfairly, and the Ministry of Commerce said Sunday: "Threatening high tariffs at every turn is not the right approach to engaging with China."
But Trump took a more conciliatory tone Sunday.
"Don’t worry about China, it will all be fine!," the US president said in a post on his Truth Social account.
Trump relativised the importance of China's latest rare earths export restrictions in the efforts by Beijing and Washington to resolve their trade tensions.
"Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I," he wrote.
The comments helped shift sentiment, with the dollar perking up and US stocks futures rebounding.
"To be blunt, this is just such nonsense -- the heaving to and fro on social media posts -- but it is what it is, and the stock market seems to be fine playing the part of the puppet," said Briefing.com analyst Patrick O'Hare.
"Friday's price action exposed how vulnerable market pricing is to developments that threaten the rose-colored outlook embedded in premium valuations," he added.
The latest spat follows months of fragile peace between the economic superpowers as they looked to reach a full trade deal after Trump's tariff bombshell in April that saw both sides ramp up tit-for-tat levies to eye-watering levels.
One of the winners of this year's Nobel economics prize, France's Philippe Aghion, warned Europe that it must not let the United States and China dominate technological innovation.
"I think European countries have to realise that we should no longer let the US and China become technological leaders and lose to them," Aghion told reporters Monday.
The prize was awarded also to American-Israeli Joel Mokyr and Canada's Peter Howitt for work on technology's impact on sustained economic growth.
The week kicked off with price recoveries for bitcoin and oil.
The cryptocurrency tumbled over the weekend following Trump's tough talk on China, while crude futures reversed big losses caused by the Israel-Hamas peace deal.
- Key figures at around 1330 GMT -
New York - Dow: UP 0.8 percent at 45,852.32 points
New York - S&P 500: UP 1.2 percent at 6,628.99
New York - Nasdaq Composite: UP 1.7 percent at 22,586.05
London - FTSE 100: DOWN 0.2 percent at 9,412.02
Paris - CAC 40: DOWN less than 0.1 percent at 7,912.28
Frankfurt - DAX: UP 0.2 percent at 24,292.16
Hong Kong - Hang Seng Index: DOWN 1.5 percent at 25,889.48 (close)
Shanghai - Composite: DOWN 0.2 percent at 3,889.50 (close)
Tokyo - Nikkei 225: Closed for a holiday
Euro/dollar: DOWN at $1.1574 from $1.1615 on Friday
Pound/dollar: DOWN at $1.3333 from $1.3352
Dollar/yen: UP at 152.17 yen from 151.57 yen
Euro/pound: DOWN at 86.77 pence from 86.98 pence
Brent North Sea Crude: UP 1.2 percent at $63.45 per barrel
West Texas Intermediate: UP 1.2 percent at $59.60 per barrel
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B.Puglisi--RTC
