[New York Stock Exchange] Broad Rally on Hopes of Easing U.S.-China Trade Tensions... Nasdaq Surges 2.2%

Trump Sends Conciliatory Message Amid Summit Tensions
"Everything Will Be Fine with China" ... U.S. Treasury Secretary Also Signals Upcoming Summit
Broadcom Surges 10% on OpenAI Partnership; Tech Stocks Rally

On October 13 (local time), all three major indices of the New York Stock Exchange closed higher, buoyed by expectations of easing U.S.-China trade tensions. After U.S. President Donald Trump made comments aimed at de-escalating tensions with China, bargain hunters returned to the market, which had plunged on October 10 due to concerns over a full-scale trade war between the two countries, leading to a rebound. Additionally, news of strengthened cooperation between OpenAI and Broadcom further boosted technology stocks.

On this day, the Dow Jones Industrial Average, which is centered on blue-chip stocks, closed at 46,067.58, up 587.98 points (1.29%) from the previous session. The S&P 500 Index, which focuses on large-cap stocks, rose by 102.21 points (1.56%) to 6,654.72, while the technology-heavy Nasdaq Index surged by 490.178 points (2.21%) to close at 22,694.608.

By sector, technology stocks showed particularly strong gains. U.S. semiconductor company Broadcom soared 9.88% on news that it had signed a multi-year agreement with OpenAI, the developer of ChatGPT, to build customized artificial intelligence (AI) chips and computing systems. Oracle jumped 5.14%. Nvidia and AMD rose by 2.88% and 0.77%, respectively.

This stock market rally was fueled by President Trump's conciliatory remarks toward China. The previous day, he posted on his self-created social networking service, Truth Social, saying, "The United States is trying to help China, not hurt it," and "Don't worry about China. Everything will be fine." He also added, "Highly respected President Xi (referring to Chinese President Xi Jinping) has simply gone through a difficult time," and "He does not want his country to fall into a recession, and neither do I."

In the lead-up to the U.S.-China summit scheduled for later this month in Gyeongju, South Korea, the two countries have been engaged in a back-and-forth over rare earth export controls and ultra-high tariffs reaching 100%. Notably, President Trump's hardline comments toward China caused the New York Stock Exchange to plunge on October 10, wiping out approximately 2 trillion dollars in market capitalization in a single day. In response, he made a conciliatory gesture the previous day to ease concerns about the summit's possible collapse and financial market instability, which led to the rally in the stock market on this day.

U.S. Treasury Secretary Scott Besant also stated in a Fox News interview that there had been significant communication between the U.S. and China over the weekend, saying, "We have eased tensions to a significant degree. President Trump will meet President Xi in South Korea, and I believe that summit is still scheduled to take place."

Tobin Marcus, Chief U.S. Policy Strategist at Wolfe Research, said, "While fundamental tensions and uncertainties remain, concerns about the risks of 100% tariffs or destructive export controls are likely to ease as long as U.S.-China dialogue continues," adding, "President Trump seems to be signaling to investors that bargain hunting is safe."

Mark Hackett, Chief Market Strategist at Nationwide, commented, "Investor appetite remains strong," and said, "If this recovery continues, individual investors will be less easily shaken, and it will once again remind the market that bargain hunting is effective."

Easing tensions in the Middle East also contributed to improved investor sentiment. President Trump, who brokered a ceasefire between Israel and Hamas, visited Egypt on this day and signed the Gaza Peace Declaration. Under the terms of the ceasefire agreement he mediated, Hamas released all 20 surviving Israeli hostages, and Israel released 2,000 Palestinian prisoners.

Government bond yields remained steady. The yield on the 10-year Treasury note, the global benchmark for bond yields, stood at 4.05%, while the yield on the 2-year Treasury note, which is sensitive to monetary policy, was at 3.52%, both unchanged from the previous day.