Wall St bounces back as Trump dials down China talk

Stocks on Wall Street and in Europe bounced back on Monday after US President Donald Trump quickly reversed his ratcheting up of rhetoric over China, with the tech-heavy Nasdaq Composite roaring back into life as semiconductor firm Broadcom surged on its latest deal with artificial intelligence giant OpenAI.

Meanwhile, JPMorganChase joined the America First bandwagon, with the world’s biggest bank by market capitalisation planning to invest US$10 billion in companies critical to US national security.

Brent crude oil prices nudged higher as the Trump-brokered ceasefire deal between Israel and Hamas was signed after the return of the 20 hostages still alive in Gaza, while the Organisation of the Petrol Exporting Countries maintained its forecast for growth in demand.

That upbeat sentiment is poised to carry through to the antipodes, with Statistics New Zealand due to release credit and debit card spending figures for September, while PGG Wrightson holds its annual meeting having raised its earnings guidance yesterday and Smartpay shareholders to vote on whether to accept a $290 million takeover.

What goes down

Stocks on Wall Street surged on Monday, with the S&P 500 up 1.6% in late trading and the tech-heavy Nasdaq climbing 2.2% after US President Donald Trump walked back from his threats to slap new tariffs on Chinese imports, saying all will be fine in a post on his Truth Social platform.

Treasury secretary Scott Bessent said US and Chinese officials are meeting this week and that there’s time to de-escalate the recent flare-up.

“Cooler heads are prevailing after the US-China trade war escalated on Friday, and this has contributed to some recovery in risk assets,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Trump’s walk-back first thing triggered a sharp rally in US equity futures as soon as Asia opened and this has been reflected in the cash market overnight.”

JPMorganChase gained after saying it plans to invest US$10 billion in companies it deems critical to US national security, ahead of its quarterly earnings later this week.

Semiconductor firms were among those pacing gains, with Broadcom jumping 10% in late trading after signing a multi-billion-dollar supply deal with OpenAI to deploy 10 gigawatts of chips, without disclosing the terms of the deal.

Investors have been wary of the increasingly circular nature of AI supply deals, and former Intel chief Pat Gelsinger said the market is in a bubble that probably has some years to run, and that he hoped it spurs more domestic energy production.

Bloom Energy gained after Brookfield Asset Management said it will invest up to US$5 billion in the company to help deploy its fuel cells for AI data centres.

Peace in the Middle East

Meanwhile, Brent crude oil futures were up 1.2% at US$63.51 at 7am in Auckland as tensions in the Middle East eased, with Trump overseeing the signing of a ceasefire between Israel and Hamas after the remaining 20 hostages were released in Gaza.

Separately, OPEC maintained its forecasts for oil demand over the coming years, with production rising in September.

Stock markets across the Atlantic were also stronger, with the UK’s FTSE 100 index up 0.2%, Germany’s DAX 30 gaining 0.6% and France’s CAC 40 increasing 0.2%.

French President Emmanuel Macron rejected calls for his resignation, with his latest government threatened by two no-confidence motions. Macron turned to Sébastien Lecornu for a second time to take up the prime minster role, less than a week after Lecornu resigned.

The kiwi dollar rose to 49.52 euro cents at 7am in Auckland from 49.35 cents yesterday.

That upbeat sentiment is set to carry over to the antipodes, with Australian futures pointing to a 0.2% increase for the S&P/ASX 200 index when trading opens across the Tasman, while the kiwi dollar traded at 57.32 US cents at 7am from 57.35 cents.

Local data include electronic card spending for September, with retailers still seeing tough domestic trading conditions.

PGG Wrightson holds its annual meeting in Christchurch today, having raised its earnings guidance late yesterday, saying there’s been a noticeable improvement in farmer confidence in the new financial year.

Meanwhile, Smartpay shareholders will vote on whether to accept a $1.20 per share takeover offer by Shift4 Payments at a special meeting in Sydney today.

Reporting by Paul McBeth. Image from Vandan Patel on Unsplash.