Wall Street Rebounds as Trade Tensions Cool Down

If there’s one thing that never goes out of style on Wall Street, it’s “buying the dip.”

After Friday’s bloodbath triggered by Trump’s threat of new 100% tariffs on China, markets staged an impressive rebound Monday as both Washington and Beijing tried to sound more diplomatic.

A Much-Needed Bounce

The Dow Jones climbed +1.3%, while the Nasdaq jumped +2.2%, clawing back a good chunk of Friday’s losses, the biggest one-day drop since April. Investors seemed eager to move past the tariff tantrum, reassured by a softer tone from both sides and a hint that talks could resume soon.

U.S. Treasury Secretary Scott Bessent added some calm when he confirmed that Trump is still expected to meet his Chinese counterpart in South Korea. It’s anyone’s guess how long this détente lasts, but for now, markets clearly preferred optimism over panic.

Broadcom and OpenAI Light Up the AI Space

The real fireworks came from Broadcom (AVGO | +9.88%), which announced a strategic partnership with OpenAI to build custom AI chips with a staggering 10 gigawatt annual energy capacity, roughly what 8 million U.S. households consume in a year. That’s not just a deal; that’s an energy ecosystem.

Investors cheered the move, sending AVGO soaring. Other semiconductor names like Micron (MU | +6.15%) and Qualcomm (QCOM | +5.33%) rode the same wave. OpenAI, meanwhile, seems to be collecting chip partners like Pokémon, after recent deals with Nvidia, AMD and Oracle, this latest alliance cements its dominance in the AI arms race.

My Microship Stocks Board after yesterday's close...

The irony? OpenAI is still burning through mountains of cash and doesn’t expect positive cash flow before the end of the decade. But as long as AI remains the market’s golden child, that hardly seems to bother anyone.

Rare-Earth Miners Surge on Supply Jitters

Away from the glitz of AI, the spotlight briefly shifted to rare-earth miners after China clarified its export stance.

MP Materials (MP | +21.34%) extended Friday’s 8% rally as investors rushed into companies tied to critical minerals. Smaller players like USA Rare Earth (USAR | +18.6%), Ramaco Resources (METC | +11.06%), and Critical Metals (CRML | +55.41%) also went ballistic.

Commodities and Crypto: Signs of Life

Gold and silver continued their record-breaking run, rising 3–7% amid tight supply in London’s bullion vaults. Lease rates for silver reportedly topped 35%, highlighting just how scarce the metal has become. Oil, which hit a five-month low last week, finally bounced back +1% as fears of a deeper trade war eased.

Even the battered crypto market managed to breathe again after Friday’s margin-call massacre. Let’s just say the weekend was long for anyone trading with 50x leverage.

Earnings Season Kicks Off

With the government still in partial shutdown (and key economic data delayed until later this month), all eyes now turn to earnings season.

The big banks take center stage Tuesday: JPMorgan (JPM | +2.35%), Citigroup (C | +2.31%), and Wells Fargo (WFC | +1.67%) are up first. Expect traders to parse every line of their reports for clues on credit demand, loan defaults, and the general health of the economy.

Meanwhile, Beyond Meat (BYND | -48.51%) is learning the hard way that dilution is not the new protein. The company announced plans to convert bonds into shares, effectively halving its market value overnight.

And finally, Bloom Energy (BE | +26.52%) struck a $5 billion partnership with Brookfield Asset Management (BAM | +3.45%) to build data and power infrastructure for AI, another sign that everything, literally everything, is becoming an AI story.

My Take:

The market’s resilience after such a brutal Friday says a lot about sentiment.

Retail investors are still piling into equities, AI hype remains unshaken, and “fear” is a word seemingly erased from Wall Street’s vocabulary. But make no mistake, when optimism runs this hot, corrections tend to be sharp. Enjoy the bounce, but don’t fall asleep at the wheel!

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Kristoff - ChartMill

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