U.S. stock futures pointed to a strong rebound Monday morning, signaling a potential recovery after Friday’s steep market losses.
Investors appear ready to step back into the market and scoop up shares at lower prices after last week’s heavy sell-off. Friday’s session saw major indexes tumble to one-month lows as escalating U.S.-China trade tensions spooked investors. President Donald Trump threatened a “massive increase” in tariffs on Chinese imports in response to Beijing’s expanded restrictions on rare earth exports.
Over the weekend, however, Trump struck a more conciliatory tone, helping to ease some of the fears that rattled markets.
“Don’t worry about China, it will all be fine!” Trump said on Truth Social. “Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!”
Even with futures pointing higher, trading volumes could be lighter than usual due to the Columbus Day holiday, with some investors likely staying away from their desks.
A quiet economic calendar may also contribute to muted activity. The ongoing government shutdown has delayed several key releases. Bureau of Labor Statistics confirmed that its consumer price index report, originally scheduled for Wednesday, will now be released on Friday, October 24. The agency emphasized that the data remains essential for the Social Security Administration to meet its legal deadlines for benefit payments.
With macroeconomic data on hold, earnings season is likely to dominate sentiment. Major financial institutions — Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), and Morgan Stanley (NYSE:MS) — are all set to report their quarterly earnings later this week.
Friday’s slump saw the Nasdaq Composite plunge 820.20 points, or 3.7%, to 22,204.43. The S&P 500 slid 182.60 points, or 2.7%, to 6,552.51, while the Dow Jones Industrial Average lost 878.82 points, or 1.9%, to close at 45,479.60.
All three major indexes posted steep weekly losses: the Dow shed 2.7%, the S&P 500 fell 2.4%, and the Nasdaq dropped 2.5%.
Trump’s earlier remarks accusing China of “becoming very hostile” and threatening a “massive increase” in tariffs intensified fears of further escalation. He also announced that he would skip his planned meeting with President Xi Jinping at the Asia-Pacific Economic Cooperation forum in South Korea, stating “now there seems to be no reason to do so.”
Many traders saw the early downturn as a chance to take profits after a strong rally, amid growing concerns over valuations.
A preliminary reading from University of Michigan showed consumer sentiment dipped only slightly to 55.0 in October from 55.1 the previous month. Inflation expectations for the year ahead fell to 4.6% from 4.7%, while long-term expectations held steady at 3.7%.
Trump’s trade threats hit semiconductor and hardware stocks hardest, with the Philadelphia Semiconductor Index tumbling 6.3% and the NYSE Arca Computer Hardware Index dropping 5.8%.
Oil services also sank alongside crude prices, sending the Philadelphia Oil Service Index down 5.4% to its lowest level in nearly two months. Losses spread across other sectors, including steel, networking, banking, and transportation, as broad selling swept through Wall Street.
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