Easing US-China Trade Tensions Drive US Stock Market Surge
5 min read
US-China trade tensions showed signs of easing after sharp escalation last Friday, driving a broad rally in US stocks on October 13, with the three major indices gaining between 1.3% and 2.2%. Meanwhile, latest data released by open economies such as Singapore indicate that global trade frictions are weighing on regional economic growth.
US Treasury Secretary Bessent stated on the 13th that leaders of the US and China still plan to meet in South Korea, and the threat of 100% tariffs "won't necessarily happen". Previously, President Trump posted on social media saying "don't worry about China, everything will be fine," with a tone noticeably more moderate than his earlier hardline statements.
U.S. Stocks Rebound Strongly, Tech Stocks Lead the Gains
Wall Street stocks welcomed a comprehensive rebound on the 13th, with the Dow Jones Industrial Average rising 588 points to 46,068 points, the S&P 500 index climbing 102 points to 6,655 points, and the Nasdaq index surging 490 points to 22,695 points. This marked the largest single-day gain for the S&P 500 index since May 27th.[1][2][3][4]
Artificial intelligence-related stocks became the main drivers of the rebound. soared nearly 10% after announcing a partnership agreement with OpenAI, and the Philadelphia Semiconductor Index rose 4.9%. The Nasdaq Golden Dragon China Index, representing Chinese assets, surged 3.21%, with and rising 4.9% and 4.4% respectively.[2][5]
Traders noted that Bessent's statement about U.S. and Chinese leaders meeting as scheduled in South Korea was an important factor driving the stock market gains. Following Trump's threat last Friday to impose an additional 100% tariff on China, the market had plummeted, with the three major indices posting their worst performance since April.[6][7][8][1]
Trade friction affects regional economy
Data released by Singapore's Ministry of Trade and Industry on the 14th showed that the country's economy grew 2.9% year-on-year in the third quarter, down from 4.5% in the second quarter, marking the slowest growth rate in two years. The manufacturing sector saw zero growth, while construction and services sectors slowed to 3.1% and 3.5% respectively.[1][2][3]
Analysts believe that Singapore, as an open economy, is facing external demand shocks from US-China trade tensions. Chinese customs data shows that exports to the US in September fell 27% year-on-year to $34 billion, but overall exports still grew 8%, indicating that companies are accelerating their export shifts to Southeast Asia and other regions.[4]
Huaxi Securities analysis points out that the impact of the current round of US-China trade friction on the stock market may be less severe than the reciprocal tariffs in April, and the market's sensitivity to trade friction has decreased. However, experts warn that if both sides refuse to compromise, the new confrontation will almost certainly spread beyond trade.[5][6]
US Vice President Vance stated that the US has enormous negotiating leverage over China, but Trump has always been willing to engage in dialogue as a rational negotiator. China's Ministry of Commerce reiterated that regarding the tariff war, they "do not wish to fight, but are not afraid to fight," and if the US insists on its course, China will resolutely adopt countermeasures.[7][8][4]
Reference sources:
[1](https://zh.tradingeconomics.com/singapore/gdp-growth-annual)[2](https://www.nbd.com.cn/articles/2025-10-14/4089247.html)[3](https://www.8world.com/singapore/gdp-2932416)[4](https://chineseradioseattle.com/2025/10/13/china_us_trade_tension_ease/)[5](https://finance.sina.com.cn/roll/2025-10-14/doc-inftvezw3064741.shtml)[6](https://cn.nytimes.com/china/20251013/china-trump-tariff-threat/)[7](https://www.6park.com/view/news/750509.html)[8](https://www.dw.com/zh/%E7%BE%8E%E4%B8%AD%E8%B4%B8%E6%98%93%E6%88%98%E5%9B%A0%E7%A8%80%E5%9C%9F%E5%8D%87%E7%BA%A7%E5%90%8E%E8%B6%8B%E7%BC%93-%E7%89%B9%E4%B9%A0%E4%BC%9A%E4%BB%8D%E5%9C%A8%E8%AE%A1%E5%88%92%E4%B8%AD/a-74323546)[1](https://www.8world.com/singapore/gdp-2932416)[2](https://www.investopedia.com/dow-jones-today-10132025-11828817)[3](https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-10-13-2025)[4](https://www.cnbc.com/2025/10/13/stock-market-today-live-updates.html)[5](https://www.chnfund.com/article/ARda8cae7e-4e0b-fed4-48b7-3a1cf2637403)[6](https://www.8world.com/finance/dow-2932371)[7](https://www.cnn.com/2025/10/12/markets/us-china-tariff-global-markets-intl-hnk)[8](https://www.ubs.com/global/en/wealthmanagement/insights/chief-investment-office/house-view/daily/2025/latest-13102025.html)