US Stock Market Today: Dow Jones, S&P 500 Edge Higher As Trump Tempers China Stance

Wall Street opened higher on Monday, after US President Donald Trump said trade relations with China "will all be fine". Minutes into the trade, the Dow Jones Industrial Average rose 380.88 points or 0.84%, S&P 500 also rose over 1.17%, and Nasdaq was up 1.79%.

US stocks fell on Friday after Trump's threat of higher tariffs on China. Dow Jones closed 878.82 points or 1.9% lower, while S&P 500 ended 2.71% lower. Nasdaq also slumped 3.56% on Friday. The broad-based decline was the largest since April 10.

Despite the positive start, Wall Street is likely to remain cautious over the US government shutdown jitters.

"There is a belief emerging that this is mostly negotiating tactics on both sides,” Jim Reid, global head of macro research and thematic strategy at Deutsche Bank AG told Bloomberg. “The market will begin to price in a reasonable probability of a deal once the initial shock fades.”

Morgan Stanley strategist Michael Wilson warned US stocks are at risk of sinking as much as 11% if trade tensions between the US and China aren’t resolved before a November deadline, reported Bloomberg.

“If associated trade uncertainty/volatility continue into early November, we could see a larger correction than most are expecting,” Wilson wrote in a note. He forecast that the S&P 500 could drop to between 6,027 and 5,800 points in a bear-case scenario.

Nvidia Corp., JPMorgan Chase & Co. and Boeing Co. were amongst the gainers for the day. On the other hand, Coca-Cola CO., Walmart Inc., Procter & Gamble were in the red.

As the US market opened, spot gold rose 1.6% to $4,080.87 an ounce. Crude oil prices rose, with West Texas trading 1.2% higher at $59.63 per barrel.

The Bloomberg Dollar Index rose 0.2%, with the British Pound falling 0.2% at $1.3337 and the Japanese yen at 152.10 per dollar. Bitcoin, the largest traded cryptocurrency, was down 0.5% at $114,396.04.