By midday, U.S. equities were powering higher, recouping much of Friday’s selloff. The Dow was up ~1.3% (adding ~600 points), the S&P 500 gained ~1.6%, and the Nasdaq leapt ~2.0% on strength in big tech and semiconductors. (turn0news23) The rally was driven largely by President Trump’s more conciliatory tone toward China, signaling a possible de-escalation in tariff conflict. (turn0news23)

In Canada, the TSX opened modestly higher, supported by strength in materials and financials. However, gains were cautious — the market is waiting for clearer direction on trade and commodity flows.

It’s a pivot day — one where optimism is returning, but nerves remain fragile.

Macro & Policy: What’s Driving the Bounce

Trade Rhetoric Eases

The biggest catalyst today is the shift in tone on U.S.–China relations. Over the weekend, Trump threatened steep tariffs (100% in some cases) on Chinese goods amid rare earth export restrictions. Markets sold off hard. (turn0news21)

But today, he signaled a willingness to negotiate, and investors interpreted that as a softening. The reversal in sentiment is powering the rebound. Reuters described markets “rebounds amid latest U.S.–China tariff spat” as traders bet on a tempering of the heat. (turn0news22)

Still, the risk remains: this is a volatile tug between posturing and breakthrough.

Bond Market, Rates & the Data Void

Interestingly, the U.S. Treasury market is largely muted — the 10-year yield is stable, holding near previous levels as the bond market remains closed in observance of Columbus Day while equities trade. (turn0search15)

Because key economic reports (labor, CPI, retail) remain delayed due to the government shutdown, markets are more vulnerable to surprises from individual company earnings, commentary, or geopolitical headlines.

Capital & Allocation Flows

Some capital is flowing back into equities after Friday’s scare. The relief trade is pushing money toward large, liquid names first — small caps will need conviction to catch up. The rotation into tech, industrials, and materials is in evidence.

Meanwhile, in an unrelated but bullish flash, JPMorgan announced it would invest up to $10 billion into U.S. industries critical to national security (defense, manufacturing, energy) as part of a broader $1.5 trillion pledge. That signals institutional appetite for themes aligned with industrial revival. (turn0search7)

Sector Flow & Market Dynamics

Tech / AI / Semiconductors Lead

Big tech names are fueling the rally today, as the market leans back into AI, data infrastructure, and chip plays. Gains are broadening — not just concentration stocks, but adjacent names too. The narrative is shifting again: risk-on, but selectively.

That said, some names that ran ahead on hope are retracing — today is also a litmus test of whether the enthusiasm can hold under scrutiny.

Materials & Industrial Momentum

Materials (especially mining, rare metals, battery minerals) are strong as traders bet on reopening of trade corridors, easing of export straits, and reengagement in global supply chains.

Industrial and infrastructure names are also catching bids, helped by JPMorgan’s capital plan and hopes for increased domestic investment. Renewable energy and grid support plays are getting a closer look given the broader energy storage / climate push.

Defensive / Safe Havens & Commodities

Gold continues to shine — silver is under pressure, and the metals complex is volatile. The “safe-haven” bid is still very much in play amid macro uncertainty. (turn0search18)

Energy names are mixed: crude is edging higher as risk appetite returns, but the volatility in oil and natural gas means sentiment could swing rapidly.

Canadian Flavor

On the TSX, resource names (especially mining, base metals, forestry) are participating in today’s upside, buoyed by hopes of trade thaw. Financials are steady, though rate sensitivity limits outsized upside. Domestic industrial names tied to energy and export chains remain under watch.

Small Caps: A Delayed Rebound?

Small-cap stocks are trailing the large-cap bounce so far. The Russell 2000, which has posted meaningful quarterly gains this year, is only modestly up today, lagging in conviction. Historically, small-caps can lead up moves, but they also bleed faster in reversals. (turn0search12)

Spotlight & Themes

Insider activity & undervaluation screens: Recent Yahoo Finance coverage shows a list of undervalued small caps with insider buying that might surface in today’s rotation. (turn0search0)

Momentum candidates: Some small caps in renewable energy, industrial tooling, niche software, and specialty chemicals are seeing volume precedence.

Vulnerability to flows: Because they lack the institutional cushion, small-cap names without strong fundamentals or catalysts could underperform even in a improving tape.

Caution & Opportunity

Use today’s rally to stress-test your small-cap positions — which names show relative strength?

Monitor volume and liquidity — breakout attempts have to be backed by activity.

Be selective: avoid chasing the hot names too early without evidence of staying power.

Tactical Notes Mid-Day: What We’re Doing

Participating carefully: We opened new exposure into tech, industrial, and materials names showing strength, but with tight risk controls.

Trailing stops on swing names: Given the choppy dynamics, we’re using tighter stops on smaller or less liquid positions.

Scanning mid-caps and small caps: Looking for names breaking out intra-day that combine catalyst, sector strength, and liquidity.

Watching news flow: Trade headlines, corporate guidance, and macro comments can shift sentiment quicker than usual in this environment.

Hedging where sensible: For those with concentrated exposure, hedges or partial cash buffers are being applied.

Today’s move feels less like a confirmed turn and more like a tactical bounce — one that needs follow-through to last.

What to Watch in the Afternoon & Beyond

Here are the key levers that could tilt the rest of the session and set the tone for the week:

Any new trade statements or leaks — a misstep or escalation could yank the rug again.

Earnings reports and guidance — in this data vacuum, company-level news will punch above its weight.

Commodity moves — especially oil & metals — swings there will ripple through sectors.

Small-cap leadership shifts — if small caps begin to catch up, it could herald broader strength.

Bond & yield dynamics — though bond markets are closed, reopening will bring fresh momentum.

If the afternoon holds, we may see more participation from cyclicals and industrials. If not, we could revert to neutral.

SCN Mid-Day Verdict

It’s a relief rally — sentiment is improving, but conviction remains uneven. Large-cap names are leading the bounce, and trade de-escalation hopes are the spark. But the underlying risks (policy, liquidity, macro surprise) are still very much in play.

For SCN’s retail readers, this is a day for cautious optimism. Use strength days to reexamine holdings, scale positions with discipline, and be sensitive to reversals. Small caps may re-enter the fray — but only if they show relative strength backed by volume. We’ll continue monitoring headline flow, volume behavior, and sector rotation into the close.

Stay nimble. SCN will flag any standout small-cap traders or shift themes heading into tomorrow.