Financial Markets                      10/13 09:35

   

   NEW YORK (AP) -- And back up goes Wall Street. U.S. stocks are rallying 
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 1.4% to recover roughly half of its drop from Friday, 
which was its worst since April. The Dow Jones Industrial Average was up 473 
points, or 1%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 2% 
higher.

   "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 he 
accused China of " a moral disgrace in dealing with other Nations." He pointed 
to "an extremely hostile letter" describing curbs to China's 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 may find a working 
relationship that allows global trade to continue.

   The market's big moves bracketing the weekend echo its manic swings in 
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, with trade tensions and uncertainty 
subsiding, potentially even after a sharp drop for stock prices, conditions 
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 and was 
perhaps just looking for a potential trigger.

   It was already facing criticism that prices had shot too high following the 
S&P 500's nearly relentless 35% run 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 in April help launch stock 
prices, 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. For stocks to look less expensive, either their 
prices need to fall, or companies' profits need to rise.

   That's raising the stakes in the upcoming earnings reporting season for U.S. 
companies, which are set 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 upcoming week.

   Fastenal tumbled 3.8% after the maker of fasteners and safety supplies 
reported on Monday a profit for the latest quarter that was slightly weaker 
than analysts expected.

   At Bank of America, strategist Savita Subramanian is optimistic that 
companies across the S&P 500 can deliver a bigger overall profit than analysts 
expected. Besides reports showing a resilient U.S. economy, she also pointed to 
the benefits of the U.S. dollar's weakening against other currencies for big 
U.S. companies, which increases the value of their sales made overseas, in a 
BofA Global Research report.

   In stock markets abroad, indexes edged up in Europe following losses in 
Asia, which had their first opportunity to react to Trump's initial 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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