US stocks ended a volatile week with mixed performance as President Donald Trump’s comments on trade helped ease market anxiety. The S&P 500 slipped 0.3%, while the NASDAQ 100 dropped 0.4%. The Dow Jones Industrial Average remained nearly unchanged.
The regional banking sector outperformed, with the SPDR S&P Regional Banking ETF climbing 0.8%. Zions Bancorp rose 2.6%, and Western Alliance Bancorp gained 0.9% following steep losses earlier in the week.
Regional lenders rebounded after recent declines linked to concerns about credit quality. Robust earnings from Truist Financial Corporation, Regions Financial Corporation, and Fifth Third Bancorp have bolstered investor sentiment, while Ally Financial experienced considerable demand for automobile loans.
Analysts noted that the sector’s decline was overextended, prompting Baird to upgrade Zions to an outperform rating, citing its enhanced fundamentals. RBC Capital Markets highlighted that regional banks remain well-capitalized and adequately reserved for potential credit risk losses.
Investor sentiment improved after President Trump said proposed tariffs on China were “not sustainable,” easing fears of escalating trade tensions. Earlier threats of additional tariffs had triggered market volatility. The remarks helped stabilize the broader market, particularly after a sharp midweek selloff. Analysts said markets may continue to favor dip-buying strategies amid ongoing uncertainty around trade policy and credit conditions.
Despite the limited economic data resulting from the US government shutdown, labor market indicators remained steady. Bloomberg’s analysis of state-level data suggested jobless claims declined to about 215,000 in the week ending October 11. Economists at Goldman Sachs also estimated a similar drop, indicating continued labor market resilience.
Bond yields edged higher, with the 10-year Treasury yield increasing by two basis points to 4.00%, and the two-year yield climbing three basis points to 3.46%. The dollar slightly strengthened, supported by expectations of another potential rate cut at the upcoming Federal Reserve meeting.
Several major corporations reported earnings and strategic developments that influenced market sentiment. American Express exceeded profit estimates after launching its revamped Platinum card. Ally Financial also posted better-than-expected quarterly earnings. Conversely, shares of Eli Lilly and Novo Nordisk declined following comments from President Trump suggesting lower prices for the diabetes drug Ozempic.
In the technology sector, Broadcom’s partnership with OpenAI supported confidence in AI-related investments. However, OpenAI faced scrutiny after pausing depictions of Martin Luther King Jr. on its Sora platform due to inappropriate content.
Meanwhile, European markets followed Wall Street’s cautious tone. The Stoxx Europe 600 Index fell 0.9%, led by declines in bank stocks, while the MSCI World Index dropped 0.5%.
Gold prices retreated 2.1% to $4,235.60 per ounce, while West Texas Intermediate crude slipped 0.1% to $57.38 a barrel, reflecting subdued risk appetite as markets assessed economic data and corporate earnings.