Wall Street closed higher this Friday after statements by the President of the United States, Donald Trump, about China, and after quarterly results from regional banks alleviated concerns about credit risks.
Trump said his proposal to impose 100% tariffs on products from China would not be sustainable and that he would meet with leader Xi Jinping in South Korea.
“The market doesn’t really know what to think when Donald Trump speaks,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. “There’s just a lot of back and forth talk regarding China, trade tariffs and pretty much everything else.”
Regional bank stocks rebounded after a selloff Thursday, when Zions Bancorporation disclosed losses tied to two commercial and industrial loans and Western Alliance revealed it had filed a lawsuit alleging fraud by Cantor Group V, LLC.
“Credit fear barks more than bites,” said Jed Ellerbroek, portfolio manager at Argent Capital. “Analyzing the results of all the large banks, credit is very good. In general, there are very few pockets of weakness.”
Truist Financial rose after the bank reported higher third-quarter profits. Fifth Third Bancorp rose, Zions shares recovered from the day before’s losses and Western Alliance also advanced.
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The S&P Composite 1500 Regional Banks index rose after falling almost 6% the day before.
The S&P 500 financial sector index, which includes the largest US banks, also gained.
Strong earnings from big U.S. banks this week have set an optimistic tone at the start of the third-quarter reporting season, but with stock valuations lofty, investors are proceeding cautiously.
According to preliminary data, the S&P 500 rose 0.50%, to 6,662.44 points; The Nasdaq Composite gained 0.50%, to 22,676.15 points and the Dow Jones Industrial Average added 0.51% to 46,188.07 points.
All three major US indices posted weekly gains.
With information from Reuters.
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