Stocks Indexes Close Sharply Higher as Trump Softens Tone on China; Chip Shares Soar on Broadcom Deal with OpenAI

U.S. stocks rebounded sharply Monday, recovering nearly all of Friday’s steep losses after President Donald Trump struck a conciliatory tone on China, assuring markets that trade tensions “will all be fine.” The rebound reflected renewed optimism that escalating tariff threats may not materialize, reigniting momentum in tech and AI-linked names. Trading volumes were muted with bond markets closed for the Columbus Day holiday.

Key Headlines & Market Movers

• Markets Rally on Trump’s Reassurances: Equities staged a broad-based rebound as investors unwound last week’s risk-off trades. The Nasdaq jumped 2.2%, the S&P 500 rose 1.6%, and the Dow gained 1.3%. Trump’s comments over the weekend, signaling a willingness to ease tensions with Beijing, helped restore market sentiment after Friday’s tariff-induced selloff. Chinese ADRs and U.S. multinationals exposed to China rebounded modestly, though traders noted volatility could persist ahead of the November 1 tariff deadline.

• AI and Semiconductor Stocks Surge: AI-related names led gains after Broadcom (AVGO) surged nearly 10% on news of a partnership with OpenAI to build 10 gigawatts of custom AI accelerators. Nvidia (NVDA) added 2.9% and ON Semiconductor (ON) rallied almost 10%. Bloom Energy (BE) soared 27% after Brookfield (BAM) committed $5 billion to deploy its fuel-cell technology in AI facilities, another sign of infrastructure buildout to support AI computing demand. The renewed optimism in AI hardware and energy efficiency fueled a powerful tech-led advance.

• Gold Hits Record High as Broader Confidence Lags: Despite the equity rally, gold jumped 3.1% to a record $4,125/oz, suggesting investors remain wary of macro and policy uncertainty amid the ongoing government shutdown. Oil prices also edged higher, with WTI crude up 1.3% to $59.65, while Bitcoin recovered to around $115,900. The U.S. dollar index firmed modestly to 99.27, signaling measured risk appetite rather than a full return to “risk-on” sentiment.

• Oracle, OpenAI, and the Expanding AI Ecosystem: Oracle (ORCL) climbed 5% after executives reaffirmed confidence in OpenAI’s ability to cover $60 billion in annual cloud costs under their multiyear partnership. Oracle’s leadership also highlighted new use cases integrating OpenAI’s models into electronic health records following its Cerner acquisition. The remarks reinforced investor belief in the durability of AI-driven cloud demand, a theme dominating 2025’s market narrative.

• Treasury Prioritization Adds Fiscal Intrigue: While equities rallied, comments from Treasury Secretary Scott Bessent drew attention. He confirmed that the Treasury is “prioritizing payments” to ensure U.S. military personnel are paid during the shutdown. The maneuver, once thought impossible, suggests new flexibility in fiscal management, which may reassure bondholders but underscores Washington’s ongoing dysfunction.

S&P 500 Sector Performance

Looking Ahead

Tuesday brings the unofficial start of earnings season, led by JPMorgan Chase, Wells Fargo, and Citigroup. Investors will look for signs of credit resilience and loan growth as the shutdown delays key economic data. AI infrastructure partnerships and China trade rhetoric remain short-term market catalysts, with any new policy clarity likely to determine whether today’s rebound can sustain into midweek.

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