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ʴǻ峦:Jump Start: Positioning as the US-China trade disputeresumes(6 min)
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Thought of the day

The S&P 500 fell 2.7% on Friday, as renewed trade tensions between the US and China triggered a risk-off mood in markets. The decline, which interrupts a rally that had taken the S&P 500’s year-to-date rise to more than 15%, followed a threat from US President Donald Trump to impose a “massive increase” in tariffs on Chinese imports.

After markets closed on Friday, Trump announced additional measures, including a new 100% tariff on all imports from China, effective 1 November, and export controls on “critical software.” He also said he would consider canceling a planned meeting with China’s President Xi Jinping, following the nation’s decision to expand export controls on rare earth elements.

China retaliated by announcing new port fees on US-owned, operated, or flagged vessels, effective 14 October. These levies mirror the US port fees on Chinese-linked ships, which were introduced earlier this year. Separately, China’s antitrust regulator announced an investigation into Qualcomm, signaling Beijing’s willingness to broaden retaliation beyond trade and logistics.

Bonds rallied as investors sought safety, with yields falling across the curve. The 10-year and 2-year Treasury yields fell by 8 and 6 basis points, respectively. Meanwhile, gold rose 1%, and the DXY US dollar index fell 0.6%, reflecting heightened uncertainty in global markets.

Subsequent comments from US President Trump on Sunday sounded more conciliatory, writing on social media "Don’t worry about China, it will all be fine!" and that the US "wants to help China, not hurt it." The Chinese Ministry of Commerce on Sunday called new rare earth controls a response to recent US measures, and said "we do not want a tariff war, but we are not afraid of one."

As we publish, S&P 500 and Nasdaq equity futures are up 1.5 and 2%, respectively. Most Asian markets moved lower on Monday, with the Hang Seng down 1.7% and Japan's Topix lower by 1.9%. Gold prices rose another 1% on Monday to a new record high, trading near USD 4,070 per ounce.