Stock Market Update

Equity futures point to a higher open this morning after President Trump eased trade-related concerns with China, posting on Truth Social on Sunday, "Don't worry about China, it will all be fine!"

The post follows a separate message from Friday, when the president said China was being "very hostile" and warned of a "massive increase" in tariffs on Chinese goods, sending the stock market sharply lower. The ensuing retreat marked the worst day for the S&P 500 since the sweeping tariff announcements of early April, with tech names being hit particularly hard. 

Treasury Secretary Scott Bessent added to the optimistic sentiment this morning, saying in a Fox Business interview that the U.S. and China communicated over the weekend, and he still expects President Trump to meet with Chinese President Xi soon. 

In other global news, The New York Times reports that Hamas has released all living Israeli hostages as part of a Gaza ceasefire brokered by the United States, with President Trump stating that the war "is over" in the region.

In Washington, the government is not any closer to passing a funding resolution to end the ongoing government shutdown, with The New York Times reporting that President Trump's decision to fire government workers has deepened the divide between the two parties. 

There is no economic data of note scheduled for today. Earnings reports will ramp up tomorrow, with major banking names and several large players from the health care sector set to report this week.

The bond market is closed today for the Columbus Day holiday. 

In corporate news:

• The White House has launched TrumpRx.gov, saying that the site will connect patients directly with the best prices for medicines, increasing transparency and cutting out costly third-party markups.
• Taiwan does not believe that the chip sector will be impacted by China's rare earth restrictions, according to Reuters. 
• Apple (AAPL 249.10, +3.73, +1.5%) is in discussions to acquire talent and technology from Prompt AI, according to CNBC. 
• Warner Brothers (WBD 17.80, +0.70, +4.1%) rejected Paramount Skydance's (PSKY 17.30, +0.30, +1.8%) takeover approach, with The Wall Street Journal reporting that Paramount could take the merger plan directly to shareholders. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a lower showing to begin the week while Japan's Nikkei was closed for a holiday. Japan's Nikkei: HOLIDAY, Hong Kong's Hang Seng: -1.5%, China's Shanghai Composite: -0.2%, India's Sensex: -0.2%, South Korea's Kospi: -0.7%, Australia's ASX All Ordinaries: -0.9%. 

In news:

• President Trump threatened to impose an additional 100% tariff on imports from China due to China's intensified export controls pertaining to rare earth elements; however, additional comments made over the weekend reduced the market's level of concern about the worst-case scenario.
• President Trump also said that he has not ruled out meeting with China's President Xi just yet.
• China's trade surplus for September was smaller than expected despite an increase in the surplus with the U.S. South Korea's exports through the first ten days of October were down 15% due in part to the recent holiday.

In economic data:

• China's September trade surplus $90.45 bln (expected surplus of $98.50 bln; last surplus of $102.33 bln). September Imports 7.4% yr/yr (expected 1.5%; last 1.3%) and Exports 8.3% yr/yr (expected 6.0%; last 4.4%)
• India's September CPI 1.54% yr/yr (expected 1.70%; last 2.07%)
• New Zealand's September Performance of Services Index 48.3 (last 47.6) and August External Migration & Visitors 7.5% m/m (last 6.6%)

Major European indices trade mostly higher. STOXX Europe 600: +0.4%, Germany's DAX: +0.2%, U.K.'s FTSE 100: -0.1%, France's CAC 40: +0.3%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.5%.

In news:

• Concerns about a new batch of aggressive tariffs on imports from China have receded after President Trump assured over the weekend that the relationship with China will "all be fine" and that he has not ruled out meeting with China's President Xi.
• French President Macron reappointed Sebastien Lecornu as prime minister, who faces an immediate deadline to present a budget for 2026.
• The Dutch government seized control over Chinese chipmaker Nexperia due to a security threat being posed by the company.

In economic data:

• Germany's September WPI 0.2% m/m, as expected (last -0.6%); 1.2% yr/yr (last 0.7%)