European stocks and US futures rise as Donald Trump takes softer tone on China
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European stocks and US futures rose on Monday after Donald Trump appeared to take a more conciliatory tone towards China, saying that the US “wants to help China, not hurt it!!!”
In a post on his Truth Social platform on Sunday, Trump wrote: “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!!!”
Trump’s post came after the US president on Friday had threatened to impose additional 100 per cent tariffs on China and suggested he could cancel a planned summit with President Xi Jinping later this month.
The threats from Trump, which he made in response to a package of export controls on rare earths that Beijing unveiled last week, came after Asian markets closed at the end of the week. But they sent the S&P 500 down 2.7 per cent on Friday, its steepest one-day drop since April.
“This is the kind of dip we’ve been waiting for” as a buy signal, said analysts at HSBC. “Fundamentally, little has changed,” they added, citing the time still left for US-China negotiations and steps already being taken by big companies to mitigate tariffs.
Early on Monday, futures tracking the S&P 500 rose 1.4 per cent, clawing back some of Friday’s drop. Futures tracking the tech-heavy Nasdaq 100 were up 1.9 per cent.
“The last 72 hours show there is still scope for a negotiated agreement or just the current situation to be rolled forward,” said Geoffrey Yu, a senior strategist at BNY in London.
In Europe, the Stoxx Europe 600 index was up 0.4 per cent by late morning on Monday, with France’s Cac 40 and Germany’s Dax each rising 0.5 per cent. The FTSE 100 was up 0.1 per cent.
In Asia, stock markets fell on Monday in spite of Trump’s more accommodative tone. Hong Kong’s Hang Seng index dropped 1.5 per cent, Japan’s Topix fell 1.9 per cent and Taiwan’s Taiex lost 1.4 per cent. Mainland China’s CSI 300 index closed 0.5 per cent lower.
“The context matters,” said Arun Sai, senior multi-asset strategist at Pictet. “Investors were already nervous about market valuations, the AI bubble — when we’re trading on these valuation levels, it’s fair to have a knee-jerk reaction.”
Bum Ki Son, a senior regional economist at Barclays in Singapore, said economies in Asia were “among the most exposed to trade and China uncertainties compared to other regions”.
The moves came after Beijing criticised Trump’s plan to impose additional tariffs on Chinese exports and threatened new countermeasures on Sunday. “China’s position on tariff wars has been consistent: we do not want to fight but we are not afraid to fight,” said the commerce ministry.
The price of gold, often seen as a haven asset, hit an all-time high of $4,078 a troy ounce, extending a rally in which the price has risen more than 50 per cent this year.
Additional reporting by Ian Smith in London
