Wall Street ends higher as investors digest Trump’s trade comments
NEW YORK: Wall Street closed higher on Friday (Oct 17) as investors weighed US President Donald Trump’s latest remarks on China and upbeat quarterly results from regional banks helped ease concerns about credit risks.
Trump said his proposed 100 per cent tariff on Chinese imports “would not be sustainable”, softening his tone after a week of escalating trade rhetoric. However, he again blamed Beijing for the impasse in talks, which began after China imposed tighter export controls on rare earth minerals.
“The market doesn’t really know what to take when Donald Trump speaks,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. “There’s just a lot of back-and-forth comments with regards to China and trade tariffs and pretty much everything else.”
REGIONAL BANKS REBOUND
Financial stocks recovered from Thursday’s selloff after fresh results reassured investors about the sector’s stability.
Zions Bancorporation shares jumped 5.8 per cent, rebounding from losses a day earlier, while Western Alliance gained 3.1 per cent. The S&P Composite 1500 Regional Banks Index climbed 1.8 per cent, after tumbling nearly 6 per cent the previous day.
“There’s a lot more bark than bite on the credit fears,” said Jed Ellerbroek, portfolio manager at Argent Capital. “Looking through all the big banks’ results, credit is very good. Overall, there are very few pockets of weakness.”
Truist Financial rose 3.7 per cent after posting higher third-quarter profit, while Fifth Third Bancorp advanced 1.3 per cent.
BIG BANKS, TECH STOCKS STEADY
Strong results from JPMorgan and other large banks helped set an optimistic tone for the third-quarter earnings season. Analysts now expect S&P 500 earnings to grow 9.3 per cent, up from 8.8 per cent at the start of October, according to LSEG I/B/E/S.
Wall Street’s heavyweight technology stocks were mixed: Tesla rose 2.5 per cent, Apple added almost 2 per cent, while Amazon slipped 0.7 per cent.
Eli Lilly fell 2 per cent after Trump vowed to lower prices for weight-loss drugs, and State Street declined 1.4 per cent after missing net interest income estimates.
INDEXES FINISH THE WEEK HIGHER
The S&P 500 gained 0.53 per cent to close at 6,664.01 points, the Nasdaq Composite added 0.52 per cent to 22,679.98, and the Dow Jones Industrial Average rose 0.52 per cent to 46,190.61.
For the week, the S&P 500 climbed 1.7 per cent, the Nasdaq rose 2.1 per cent, and the Dow gained 1.6 per cent.
The CBOE Volatility Index dropped to 21.5, easing from a six-month high earlier in the day.
Nine of the 11 S&P 500 sector indexes advanced, led by consumer staples, up 1.23 per cent.
Following a nearly 14 per cent rally this year, the S&P 500 is now valued at 23 times expected earnings, its most expensive level in five years.
