S&P 500 Rises as Trump Softens China Trade Stance and Regional Banks Rebound
The S&P 500 climbed on Friday after trimming earlier losses, supported by a rebound in regional banks and renewed optimism around U.S.-China trade talks. Investor sentiment improved as President Donald Trump adopted a softer tone toward Beijing.
By 2:52 p.m. ET (18:52 GMT), the Dow Jones Industrial Average was up 302 points (0.7%), while the S&P 500 gained 0.5% and the NASDAQ Composite rose by 0.5%.
Ongoing Government Shutdown Weighs on Confidence
Despite the market rebound, the U.S. government shutdown, now in its third week, continued to dampen confidence. It has delayed key economic data releases and raised concerns over short-term economic growth.
Trump Signals Softer Trade Stance with China
Trump told Fox Business that the high tariffs on Chinese goods would not remain in place long-term, describing the situation as “not sustainable.” His remarks signal a potential shift in trade policy ahead of his expected meeting with Chinese President Xi Jinping in South Korea in two weeks.
“I think we’ll be fine with China,” Trump said, expressing optimism about reaching a fair trade agreement.
These comments came just a week after Trump threatened to impose an additional 100% tariff on Chinese imports starting November 1, in response to China’s restrictions on rare earth mineral exports.
Regional Banks Recover Amid Earnings Strength
Regional banks staged a strong recovery after a steep selloff earlier this week driven by credit risk concerns. Positive third-quarter earnings helped restore confidence in the sector, even as some lenders flagged issues tied to borrower defaults.
Zions Bancorporation (NASDAQ:ZION) and Western Alliance Bancorporation (NYSE:WAL) disclosed loan losses linked to potential fraud, reviving worries about credit quality among smaller lenders.
However, upbeat results from peers provided balance.
- Fifth Third Bancorp (NASDAQ:FITB) reported a 14% profit increase in Q3, driven by strong fee income, though it took a $178 million loss tied to a bankrupt auto dealer.
- Regions Financial (NYSE:RF) posted higher quarterly profits thanks to strong capital markets and rising interest income.
- Truist Financial (NYSE:TFC) also beat analyst expectations with robust loan growth and higher fee income.
Broader Market and Corporate Highlights
In tech, Oracle Corporation (NYSE:ORCL) projected a bullish long-term outlook fueled by unprecedented AI-driven demand.
Elsewhere, CSX Corporation (NASDAQ:CSX) reported a drop in quarterly profit due to one-time impairment charges, but adjusted results still beat forecasts.
Meanwhile, Micron Technology (NASDAQ:MU) announced plans to halt server chip supplies to Chinese data centers, following an earlier government ban on its operations in 2023, according to Reuters.
