Oct 13 – Wall Street’s main indexes ended sharply higher on Monday, led by gains in Broadcom and other chipmakers, after President Donald Trump struck a conciliatory tone about renewed U.S.-China trade tensions, easing investor worries.
Lifting sentiment, U.S. Treasury Secretary Scott Bessent said in an interview with Fox Business Network that Trump was on track to meet his Chinese counterpart in South Korea as the two sides work on de-escalating trade frictions that grew late last week.
AI-related tech stocks were the biggest winners in Monday’s rebound. Broadcom (AVGO.O), opens new tab surged almost 10% after partnering with OpenAI to produce the startup’s first in-house artificial intelligence processors.
The Nasdaq notched its biggest one-day gain since May 27.
“AI continues to be the momentum driver, and it’s not surprising investors have purchased the dip,” said Sam Stovall, Chief Investment Strategist at CFRA Research, adding that investors should remain cautious as long as Trump’s dispute with China remains unresolved.
Wall Street tumbled on Friday, with the S&P 500 and Nasdaq posting their steepest weekly declines in months.
The latest rupture followed China’s announcement on Thursday that it would dramatically expand its rare earths export controls. In retaliation, Trump on Friday said he would apply an additional 100% tariff on imports from China and impose export controls on all critical U.S.-made software from November 1.
However, over the weekend, Trump said “it will all be fine” and that the U.S. did not want to “hurt” China. China on Sunday blamed the U.S. for the escalation but did not roll out further countermeasures.
Other AI-related chipmakers also gained, with Nvidia climbing 2.8% and Micron Technology jumping over 6%. The PHLX chip index (.SOX), opens new tab soared almost 5%.