While the bond market was closed for Monday’s Columbus Day/Indigenous Peoples’ Day holiday, the stock market was not. And those who participated in today’s session were in an upbeat mood after President Donald Trump toned down his rhetoric toward China.
At the close, the blue-chip Dow Jones Industrial Average was up 1.3% at 46,067, the broader S&P 500 had gained 1.6% to 6,654, and the tech-heavy Nasdaq Composite was 2.2% higher at 22,694.
This marked a sharp turnaround from Friday’s price action, which was decidedly lower across the board after President Trump accused China of “becoming very hostile.” He also threatened to hike tariffs and cancel an upcoming meeting with Chinese President Xi Jinping.
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But in a Sunday post on Truth Social, Trump wrote, “Don’t worry about China, it will all be fine!” And this seemed to be enough to calm Wall Street’s nerves.
“Investors may have thought the tariff story had run its course as a market catalyst, but last week showed it can still pack a punch,” says Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley. “Although the White House appeared to moderate its stance over the weekend, additional flare-ups still have the potential to trigger sharp responses from the markets.”
Larkin notes that the focus of this week will be on the new earnings season, especially with the release of the next Consumer Price Index (CPI) report delayed by one week due to the government shutdown.
Big banks start reporting Q3 earnings tomorrow
Indeed, several of the country’s biggest banks are featured on this week’s earnings calendar, unofficially marking the start of the third-quarter reporting season.
Among them is JPMorgan Chase (JPM), which will release its Q3 results ahead of Tuesday’s open.
Analysts expect JPM, which is the country’s largest bank by assets, to report earnings of $4.87 per share, up 11.4% year over year (YoY), on revenue of $45.6 billion (+6.8% YoY).
“Global U.S. banks are expected to report higher net revenue and earnings per share on a year-over-year basis in what is seasonally a weaker quarter,” says CFRA Research analyst Kenneth Leon.
However, he adds that net interest income (NII) – a key profitability measure for banks that shows the difference between revenue made on interest-bearing accounts like loans and the costs paid for those assets – will likely “show only moderate growth as lower rates from the Federal Reserve narrow loan interest spreads.”
As for today’s single-stock news, Broadcom (AVGO) soared 9.9% – making it one of the best-performing S&P 500 stocks Monday – after it became the latest chipmaker to partner with OpenAI.
The two companies announced that they are collaborating to build and deploy 10 gigawatts of OpenAI-designed artificial intelligence (AI) chips and computing systems by the end of 2029.
“By designing its own chips and systems, OpenAI can embed what it’s learned from developing frontier models and products directly into the hardware, unlocking new levels of capability and intelligence,” the press release stated.
Broadcom joins the likes of Nvidia (NVDA), Oracle (ORCL) and Advanced Micro Devices (AMD), which have all announced commitments with OpenAI in recent weeks.
Bloom Energy jumps in Brookfield deal
Elsewhere in the AI space, Bloom Energy (BE) jumped 26.5% after the company unveiled a strategic partnership with Brookfield Asset Management (BAM, +3.5%).
According to the agreement, Brookfield will invest up to $5 billion to use Bloom Energy’s fuel cell technology to build and design “AI factories.”
“Over the next decade, foundational models and generative AI are expected to drive ongoing demand for power,” Brookfield stated in the press release, adding that “this partnership adds a powerful new tool to our global growth strategy, especially in a grid-constrained market environment.”
