Stocks closed sharply higher yesterday, staging a strong rebound after Friday's losses. The S&P made up nearly 60% of Friday's drop. The Nasdaq recouped 62%. And the small-cap Russell 2000 made back 92% of Friday's drop. That's still a net loss given Friday's decline. But a much more moderate one.

As you know, President Trump on Friday sent stocks reeling after saying that China was "becoming hostile" and would consider imposing an additional 100% tariff on China in retaliation for the country's announcement that they were enacting new export restrictions on rare earth materials.

But President Trump's softer comments on Truth Social on Sunday afternoon when he said, "Don't worry about China, it will all be fine!" sparked the rebound.

His full post read: "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. The U.S.A. wants to help China, not hurt it!!!"

They are still expected to meet later this month at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea. It takes place on 10/31-11/1.

Rare earths are essential elements in many of today's modern technologies and industries. This includes smartphones, flat-screen TVs, EV batteries, MRI scanners, semiconductors, and so much more, not to mention military weapons and defense systems.

But China mines and produces 60% of the world's rare earth minerals, and processes 90%.

Given its importance to the economy, technological innovation, and national defense, this is a very important subject.

China's move is largely seen as an effort to gain some leverage ahead of their APEC talks. Especially given the U.S. export controls on semiconductor chips to China.

In other news, it was reported that OpenAI has made a deal with Broadcom to produce AI processors. That comes on the heels of last week's deal with AMD for semiconductors.

The AI trade is alive and well. And the biggest players are racing to secure their supplies for the massive computing power they'll need.

Not much in the way of economic reports out today other than the NFIB Small Business Optimism Index.

Today is day 14 of the government shutdown. If it makes it to day 17, it will become the 3rd longest shutdown, replacing the previous number three spot of 16 days back in 2013.

The second longest shut was 21 days back in 1995/1996. And the longest shutdown was 35 days back in 2018/2019.

Fortunately, shutdowns have historically had little impact on the market. Since 1980, there have been 10 shutdowns. And the market has shown an average gain on 1.69% during those shutdowns, with a full 9 of those 10 times finishing higher.

We'll have to see how long this one lasts. For now, however, the market has been unbothered by it.

Earnings season unofficially kicks off this week with plenty of big banks (and others) on deck to report. Today we'll hear from JPMorgan Chase, Citigroup, Goldman Sachs, and BlackRock, along with Johnson & Johnson, to name a handful. All in all, we'll hear from another 132 companies between today and the rest of the week.

Earnings season officially begins next week when Alcoa reports on Wed., 10/22, after the close.

Earnings season is always an exciting time since stocks typically go up during earnings season.

And I'm expecting the same thing to happen this earnings season as well.

See you tomorrow,