US stocks experienced an uptick on Friday, primarily driven by President Trump’s comments that alleviated fears regarding escalating trade tensions with China. This development contributed to a rebound in regional bank stocks, which had recently suffered significant losses due to concerns over credit quality and rising bad loans. The Dow Jones Industrial Average climbed over 0.5%, while both the S&P 500 and the tech-heavy Nasdaq Composite also increased by approximately 0.5%, marking a positive close for all three major indices.
Trump expressed optimism regarding ongoing talks with China, stating that his forthcoming meeting with Chinese President Xi Jinping was still on track. He further downplayed the potential imposition of 100% tariffs on Chinese goods, previously set for November 1, calling such measures “not sustainable” for either nation’s economy.
In parallel, regional bank stocks began to recover from a tumultuous week following a series of mixed earnings reports. Institutions such as Truist Financial Corp., Huntington Bancshares, and Fifth Third Bancorp reported promising earnings on Friday. The resurgence in these stocks helped alleviate fears that had grown after disclosures from two regional banks highlighting issues related to loan quality, allegedly connected to fraudulent activities. This turmoil was compounded by JPMorgan CEO Jamie Dimon’s comments about potential credit market risks.
Despite the overall market rally, concerns over a prolonged US federal shutdown lingered. This shutdown is currently tied for the third longest in US history and has raised fears that it could extend through November and possibly beyond Thanksgiving. Federal workers are facing delayed paychecks, as Trump hints at blocking back pay amidst legal challenges to his attempts to reduce federal workforce numbers.
While stock futures fluctuated at the market’s opening, they later stabilized due to the president’s remarks. Earnings reports from regional banks offered a glimmer of reassurance to investors, with key indices such as the KBW Nasdaq Regional Banking Index bouncing back after its worst single-day decline since last April.
In other market sectors, oil prices were on track for their third consecutive weekly loss, closing below $57 per barrel due to oversupply concerns exacerbated by geopolitical tensions. Meanwhile, Oracle shares suffered a significant decline of over 7% following confirmation of a security breach involving its E-Business Suite applications, relating to extortion attempts by hackers.
Mixed results were evident in the technology sector. While Nvidia faced a minor weekly loss, shares of Alphabet received a boost from new product launches. In the broader fixed-income market, Treasury yields rose amidst easing credit concerns, with the 10-year Treasury yield hovering just above 4%.
Overall, Friday marked a day of cautious optimism for US markets, driven by a combination of positive corporate earnings, alleviating trade conflict fears, and a potential recovery in regional banking stocks.
