TLDR
- S&P 500 posted its best week since August, gaining 0.5% on Friday.
- Regional bank shares rebounded, with Zions rising 5.8% and Western Alliance 3.1%.
- Treasury yields climbed as investors shifted from bonds to equities.
- Gold fell 2.2% while crude oil rose 0.3% amid renewed risk appetite.
A late-week rebound lifted U.S. stocks on Friday after President Donald Trump’s remarks eased investor concerns about ongoing trade tensions with China. His comments, combined with stronger results from regional banks, helped the S&P 500 record its best week since August. Meanwhile, bond yields rose, and precious metals declined as investors rotated back into equities after several volatile sessions.
Trump’s Optimism Boosts Investor Confidence
President Trump expressed confidence that the U.S. and China could move closer to resolving trade disputes. “I think we’re doing very well. I think we’re getting along with China,” he said, noting that his upcoming meeting with President Xi Jinping would proceed as planned. His tone encouraged optimism among traders who feared renewed tariff escalations between the two largest economies.
The White House’s softer stance on trade helped ease anxiety that had unsettled markets earlier in the week. Analysts said the prospect of continued talks reduced the risk of a prolonged standoff. Keith Lerner of Truist Advisory Services said that market pullbacks could create “opportunities to lean in” as investors reposition for a possible trade breakthrough.
Regional Banks Rebound After Steep Losses
Financial stocks were among the strongest performers, led by regional lenders recovering from a sharp selloff. The SPDR S&P Regional Banking ETF gained 1.6%, with Zions Bancorp rising 5.8% and Western Alliance Bancorp up 3.1%. Several banks released quarterly results that eased credit quality concerns and showed fewer loan-loss provisions than expected.
Executives at major regional banks sought to reassure investors following Thursday’s selloff linked to new loan charge-offs involving fraud cases. Their earnings reports indicated steady loan performance and stable deposits, helping to restore some confidence in the sector. The rebound suggested that investors viewed the earlier losses as excessive.
Market Moves and Economic Data
The S&P 500 added 0.5%, while the Nasdaq 100 rose 0.7% and the Dow Jones Industrial Average gained 0.5%. The Russell 2000 Index slipped 0.6%. The dollar held steady after its weakest week since August, and Treasury yields climbed from multi-month lows. The two-year yield rose to 3.46%, and the 10-year yield increased to 4%.
Economic data releases have slowed due to the ongoing U.S. government shutdown. However, Bloomberg’s analysis of state filings indicated that initial jobless claims fell to about 215,000 in the week ended October 11. Economists at Goldman Sachs estimated a similar level, signaling a stable labor market despite limited official data.
Fed officials have indicated that they may support another interest rate cut if the labor market weakens. St. Louis Fed President Alberto Musalem said rate decisions would depend on data available at each meeting. Analysts at Morgan Stanley expect a 25-basis-point reduction at the next policy meeting, citing slower economic growth.
Corporate and Commodity Developments
Oracle Corp. dropped nearly 7% after issuing a long-term forecast that fell short of investor expectations for AI-related growth. American Express reported better-than-expected earnings, while Morgan Stanley raised $8 billion through a bond sale. Drugmakers Novo Nordisk and Eli Lilly declined after Trump suggested that Ozempic prices could drop to $150 a month.
In commodities, West Texas Intermediate crude gained 0.3% to $57.66 per barrel. Spot gold fell 2.2% to $4,231.58 an ounce as investors shifted away from safe-haven assets. Bitcoin fell 1.3% to $106,475, while Ether declined 0.7% to $3,826.
Despite a week marked by uncertainty, equity funds recorded inflows of $28.1 billion, according to Bank of America data. Analysts at UBS Global Wealth Management said they expect further strength ahead, supported by earnings momentum, continued AI investment, and accommodative central bank policy.
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