(MENAFN) The New York Stock Exchange closed sharply higher Monday, fueled by renewed investor optimism after US President Donald Trump assured that relations with China “will all be fine,” suggesting a potential thaw in escalating trade disputes.

The Dow Jones Industrial Average climbed 1.29%, adding 587.98 points to finish at 46,067.58. The tech-heavy Nasdaq surged 2.21%, or 490.18 points, ending at 22,694.61. Meanwhile, the S&P 500 advanced 1.56%, gaining 102.21 points to close at 6,654.72.

Investors’ confidence also drove the Volatility Index (VIX), commonly known as Wall Street’s "fear index," down sharply by 12.14% to 19.03, reflecting reduced market anxiety.

The market rally followed Trump’s Sunday post on Truth Social, which eased fears of imminent tariff hikes. This came after Trump’s Friday threat to impose 100% tariffs on China in response to Beijing’s restrictions on rare earth exports, a move that previously wiped out $2 trillion in market capitalization.

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

Vice President JD Vance echoed this sentiment over the weekend, telling media that the US remains open to negotiations if China is “willing to be reasonable,” but emphasized that America holds “far more cards” if talks stall.

On the corporate front, chipmaker Broadcom shares surged roughly 10% after announcing a new partnership with OpenAI to supply custom AI chips. Banking giant JPMorgan Chase gained 2.4% after unveiling plans to invest up to $10 billion in sectors vital to national interests and security. Oracle’s stock jumped over 5.1%, while AMD and Nvidia rose approximately 0.8% and 2.9%, respectively.

Market participants also tracked Federal Reserve signals, as Philadelphia Fed President Anna Paulson remarked that monetary policy should “focus on balancing the risks between maximum employment and price stability,” suggesting a pivot toward a more neutral stance.

Attention now turns to Tuesday, with investors awaiting remarks from Fed Chair Jerome Powell and earnings reports from major banks including Citigroup, Goldman Sachs, Wells Fargo, and JPMorgan Chase.

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