US Stock Futures Rise After Trump’s Comments
US stock futures rose on Sunday after President Donald Trump said "don’t worry about China" following a sell-off on Friday. Dow futures rose 0.8%, S&P 500 futures rose 1.04% and Nasdaq futures rose 1.34% as of 6:32 p.m. ET.
Previous Market Decline
Stocks closed sharply lower on Friday after Trump threatened an additional 100% tariff on Chinese goods, set to take effect on November 1. That would increase tariffs on imports from China to 130% – not far from the 145% rate imposed at the height of the tariff war. The S&P 500 and Nasdaq recorded their worst day since April. The Dow had its worst day since May.
Trump’s Change in Tone
But on Sunday afternoon, Trump appeared to indicate that he might not follow through on his tariff threat. He posted on social media, saying “Everything will be okay!” Trump told reporters on Air Force 1 that China’s President Xi Jinping was "a great leader" and they had "a great relationship."
Shift in Diplomatic Language
The comments marked a change from last week when he said China was becoming "very hostile" after Beijing on Thursday tightened export restrictions on critical rare earth minerals used to make consumer electronics products.
China’s Response
Beijing threatened on Sunday to take countermeasures against the US if Trump did not abandon his tariff threat. "China’s stance is consistent," China’s Commerce Ministry said in a statement. “We don’t want a tariff war, but we’re not afraid of it.”
Market Uncertainty
Another round of tariffs would reverse progress made during months of meetings between Chinese and U.S. officials. It’s unclear whether Trump could back down from his threat of tariffs before the Nov. 1 deadline, creating uncertainty in the market similar to other tariff announcements where Trump has "backed off."
Trump’s Stance
Speaking to reporters on Air Force One on Sunday, Trump said, "Let’s see what happens" when asked about the Nov. 1 deadline. During an appearance on a news program, U.S. Trade Representative said the U.S. was "not notified in advance of China’s tightened export restrictions," although a Chinese Commerce Ministry spokesman said "relevant countries and regions" had been notified.
