U.S. stock futures pointed higher on Sunday evening as Wall Street looks ahead to a big week for the U.S.-China trade war, corporate earnings, and economic data.

On Sunday, President Donald Trump sought to calm nerves in a post on Truth Social, following his announcement on Friday that he will impose an additional 100% tariff on China and limit U.S. exports of software. 

“Don’t worry about China, it will all be fine!” he wrote. “Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”

Meanwhile, Vice President JD Vance told Fox News’s Sunday Morning Futures that the U.S. is willing to be reasonable if China is too, though he insisted Trump has the upper hand with “far more cards” than Beijing holds.

The shift in tone contrasts with Trump’s fiery rhetoric on Friday as he lashed out at China for its new export controls on rare earths, which are critical inputs across a range of industries.

“Market participants appear to be leaning into the TACO trade once more, fueled not only by what we’ve seen in the recent past, but also by conciliatory remarks over the weekend from both President Trump and Vice President Vance, suggesting that Friday’s announcement of additional 100% tariffs on Chinese imports are likely to be little more than a negotiating tactic,” Michael Brown, senior research strategist at Pepperstone, said in a note on Sunday.

Futures tied to the Dow Jones Industrial Average surged 382 points, or 0.84%. S&P 500 futures were up 1.27%, and Nasdaq futures jumped 1.79%.

The yield on the 10-year Treasury tumbled 8.9 basis points to 4.059%. The U.S. dollar was up 0.04% against the euro and up 0.48% against the yen. Gold climbed 1.43% to a new high of $4,057.50 per ounce. U.S. oil futures rose 1.29% to $59.66 a barrel, and Brent crude gained 1.32% to $63.56.

Trump had previously imposed 145% tariffs on China, then put them on hold to allow negotiations to play out. A similar pattern played out with other trade partners like the European Union, causing Wall Street to dismiss maximalist threats with the TACO (Trump always chickens out) trade.

Brown said Trump’s new China tariff, which would go into effect Nov. 1 and bring the overall level to 130%, appears to be another example of his “escalate to de-escalate” strategy.

“Assuming that this is another ‘TACO’ situation, and some clarity on that front is obtained before too long, then this is likely to prove another dip in equities that should be viewed as a buying opportunity, with the path of least resistance continuing to lead higher, if in somewhat choppy fashion,” he added.

At the same time, the Federal Reserve’s shift back to rate cuts amid still-solid economic growth should continue to boost to the dollar, which will likely shrug off tariff threats, Brown predicted.

Similarly, market veteran Ed Yardeni, president of Yardeni Research, also sees the U.S. and China pulling back from the precipice.

“If neither side were to blink, the US and Chinese economies would lead the global economy into a deep recession, if not a depression,” he wrote in a note on Sunday. “But we expect that both sides will blink very soon given the extremely adverse consequences of a trade war between the world’s two biggest economies.”

For its part, Beijing remained defiant, with the commerce ministry saying Sunday that China doesn’t want a tariff war but is also not afraid of one. It also said the export controls are not a ban on rare earth shipments but are a sovereign right.

But China’s new rare earth export policy ups the ante well beyond another tit-for-tat exchange in the trade war against the U.S.

Dean Ball, who served as a senior advisor in the White House Office of Science and Technology Policy earlier this year, wrote on X on Saturday that the policy gives Beijing the power to “forbid any country on Earth from participating in the modern economy.”

Dali Yang, a political science professor at the University of Chicago, sounded a similar alarm in a post on Sunday, saying the move marks a decisive moment that reveals what a China-led order might look like.

Looking beyond rare earths, it’s one that leverages control over strategic materials and technologies to prop up global influence.

“China is effectively saying: ‘We control the arteries of high-tech civilization.’ The rest of the world now sees that message clearly—and is scrambling to build new circulatory systems,” Yang wrote.

Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

Futures tied to the Dow Jones Industrial Average rose 48 points, or 0.11%. S&P 500 futures were up 0.12%, and Nasdaq futures added 0.18%.

The yield on the 10-year Treasury was flat at 4.322%. The U.S. dollar was down 0.07% against the euro but up 0.07% against the yen.

Gold fell 0.25% to $3,374.10 per ounce. U.S. oil prices dropped 0.27% to $62.63 per barrel, and Brent crude fell 0.41% to $65.58.

Energy markets will also be in focus this week amid continued diplomacy to end Russia’s war on Ukraine as harsher U.S. sanctions on Moscow could target its oil exports, though President Donald Trump refrained from announcing any fresh penalties after ceasefire talks Friday failed to produce a deal.

Stocks have notched two consecutive weekly gains, with the S&P 500 hitting a fresh all-time high last week. That’s as corporate earnings have continued to come in strong and as the latest inflation readings were mixed but still haven’t set off panic about the effect of tariffs.

With the labor market also looking weaker, Wall Street overwhelmingly sees the inflation data giving the Federal Reserve a green light to resume rate cuts next month, further fueling market optimism.

But those views will be tested this week. On Wednesday, the Fed will release minutes from its policy meeting in July, when central bankers kept rates steady though two officials dissented. The details should show how much debate occurred and to what extent other policymakers were leaning a certain way.

Then the main attraction will take place on Friday, when Fed Chair Jerome Powell will deliver a speech at a gathering in Jackson Hole, Wyo. The annual event previously has served as an opportunity for policymakers to tease forthcoming rate moves.

Last year, Powell signaled a pivot to cuts, saying “the time has come for policy to adjust” and that “my confidence has grown that inflation is on a sustainable path back to 2%.” But he may not drop big hints this year, potentially setting up Wall Street for major disappointment.

Meanwhile, earnings season is winding down, but the coming week will feature several top retailers. Home Depot reports Tuesday, with Lowe’s and Target due on Wednesday. Walmart will put out its numbers on Thursday.

Their quarterly updates will provide new insights into how much tariffs are affecting prices and who is picking up the extra costs. The precise impact of tariffs on inflation remains somewhat of a mystery.

While companies may be absorbing much of the tariff costs for now, it’s not clear how much longer they can keep it up and how much consumers will be able to shoulder later.

If the retail giants keep eating tariff costs, that will show up on the bottom line and in their guidance. Citi doesn’t expect consumers to get hit with big price hikes in the future, even as more levies are expected to roll out.

“Softer demand means firms will have difficulty passing tariff costs on to consumers,” chief US economist Andrew Hollenhorst said in a note. “While some firms might still attempt to slowly increase prices in coming months, the experience so far suggests these increases will be modest in size. This should reduce concerns about upside risk to inflation and increase concerns that decreased profit margins will cause firms to pullback on hiring.”

Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world. Explore this year’s list.

Trump administration officials stressed that the airstrikes on Saturday night were targeted at Tehran’s nuclear program and not aimed at regime change nor the start of a wider war that would require boots on the ground.

But the direct involvement in offensive operations—which included massive “bunker busters” dropped from stealth bombers—in what had been a conflict primarily between Israel and Iran still marked a major escalation.

Futures for the Dow Jones Industrial Average fell 153 points, or 0.36%. S&P 500 futures were down 0.39%, and Nasdaq futures slipped 0.52%.

Earlier on Sunday before premarket trading began, Wedbush Securities Managing Director Dan Ives had a bullish take for Wall Street in the wake of the U.S. attack on Iran.

“The market will view this Iran threat as now gone and that is a positive for growth in the broader Middle East and ultimately the tech sector,” he posted on X. “It will take some time for this conflict to settle, but the market will view the worst is now in the rear-view mirror. Expect stocks up.”

U.S. oil prices were up 2.8% at $75.84 per barrel after paring gains, and Brent crude leapt 2.7% to $79.07.

While global markets had been expecting to see an initial jolt for oil, energy analytics firm Kpler pointed to other mitigating factors that could soften the blow eventually.

“Expect oil to open with a sharp 7–10% gap up as risk premiums surge. But don’t be fooled, this may not last,” it posted on X.

Iran’s ability to retaliate is constrained, Kpler noted, saying a shutdown of the Strait of Hormuz is unlikely. Meanwhile, an early OPEC+ output boost for August of 411,000 barrels per day or more is increasingly likely, it added.

Escalation of the Middle East conflict could be a test of whether U.S. bonds and the dollar are still seen as safe-haven assets in times of crisis.

The yield on the 10-year Treasury edged up 1.4 basis points to at 4.389%. The dollar fell 0.32% against the euro and 0.25% against the yen. Gold, which is emerging as an alternative to the dollar, gave up gains to trade flat at $3,385.00 per ounce.

The coming week will feature several key events and economic reports. Several Federal Reserve officials will speak throughout the week, including Chairman Jerome Powell who is appearing on Capitol Hill on Tuesday and Wednesday.

Data for existing home sales, new home sales, and pending sales are due Monday, Wednesday, and Thursday, respectively, as the housing market shows signs of oversupply and weak demand.

Also on Thursday, an initial reading on the trade deficit will come out amid Trump’s tariffs along with durable-goods orders.

On Friday, the Fed’s preferred inflation gauge, the personal consumption and expenditures price index, is due.