S&P 500 posted its best gain since Ma: stocks recovered more than half of Friday's collapse

On October 13, the U.S. stock market recovered a significant part of the losses incurred at the end of last week. The S&P 500 index showed the best growth since Ma. The main U.S. indices rose by 1-2% after President Donald Trump softened his rhetoric against China and called "not to worry" about it. In addition, tensions in the Middle East began to subside and the rally in the artificial intelligence sector continued to gain momentum.

- The broad market index S&P 500 added 1.56%. Thus, it recovered more than half of the collapse on Friday, October 10, which was the worst day for it since April, writes CNBC. The index returned to the "bullish" trend, which has already added $28 trillion to the total capitalization of its companies. It was the best session for the S&P 500 since Ma, Bloomberg notes.

- The blue-chip index Dow Jones Industrial Average rose 1.3%, recovering about 70% of Friday's losses.

- The Nasdaq Composite Technology Sector Index added 2.2% on Monday amid a sharp recovery in shares of technology companies, which were hit hardest last week. Thus, shares of Oracle jumped by more than 5%, AMD and Nvidia rose by 0.7% and 2.8%, respectively. Broadcom added 10% after announcing a partnership with ChatGPT OpenAI, a developer of chatbot ChatGPT.

- The Russell 2000 index of small-cap stocks is up 2.8% after falling 3% on Friday.

- The VIX index, known as the "Wall Street Fear Index" fell 12% to 19 points. Nevertheless, its value remains close to the zone of anxiety and uncertainty(considered 20 and above).

Stocks rallied on Monday on investor hopes that the escalating trade conflict between the US and China would be less significant than it seemed on Friday. US President Donald Trump toned down his rhetoric somewhat on Sunday, writing in Truth Social, "Don't worry about China, everything will be fine." As investors have speculated, the post may indicate that the president will not follow through on his threat of a "massive duty hike" on Chinese goods, according to CNBC.

As a result of Friday's sell-off, the capitalization of U.S. stocks fell by a total of $2 trillion. However, on Monday, about 80% of securities included in the S&P 500 index were trading in the plus, the channel added.

Market sentiment also improved amid Trump's visit to the Middle East, Bloomberg writes. On Monday morning, Hamas released 20 Israeli hostages as part of a peace deal with Israel. Trump addressed the Israeli Knesset (parliament), saying that "the long and painful night is finally over."

But despite Monday's rebound, the market continues to face other challenges. The U.S. government shutdown continues into its second week, with the key payroll date for government employees approaching on October 15. In addition, the reporting season also kicks off this week. On Tuesday and Wednesday, the largest banks: Citigroup, Goldman Sachs, Wells Fargo, JPMorgan Chase, Bank of America and Morgan Stanley will present their results.

- JPMorgan analysts in a note Monday advised their clients to take advantage of the market downturn to buy stocks, CNBC wrote. At the same time, the bank advised to protect themselves from uncertainty: buy gold and silver(which hit new highs on Monday), as well as securities of energy companies, semiconductor manufacturers and banks.

- "Fundamental tensions and uncertainties remain, and we still don't believe a comprehensive [U.S.-China trade] agreement is close. However, this [Trump's] announcement reduces concerns about the risk of 100 percent duties or crippling export restrictions while negotiations are underway," Tobin Marcus, head of U.S. policy at Wolfe Research, told CNBC. - Trump seems to be signaling to investors that it's safe to buy on drawdown."

- The trade war between the U.S. and China may continue to cause turbulence in the stock market, but is unlikely to trigger a shift to a "bearish" trend, according to analysts at UBS. In their view, the current volatility creates an opportunity for investors to buy U.S. stocks at a discount. "We believe the bull market will persist, so pullbacks should be viewed as a chance for those investors who underinvested in stocks to build up long-term positions," UBS said in a note cited by CNBC.

- "Investors remain risk-averse, and if the recovery continues, it will only reinforce the notion that retail market participants aren't easily taken out of the game - and reaffirm that the strategy of buying on drawdowns works," Nationwide chief investment strategist Mark Hackett told Bloomberg.

This article was AI-translated and verified by a human editor