The U.S. stock market closed higher on Friday, with major indexes posting gains as bank stocks rebounded from recent losses. The S&P 500 rose 0.5%, marking its strongest week since early August. The Dow Jones Industrial Average and the Nasdaq composite each increased by 0.5%.
Bank stocks contributed to the upward movement after several institutions, including Truist Financial, Fifth Third Bancorp, and Huntington Bancshares, reported better-than-expected profits for the latest quarter. This helped the sector recover following a previous decline fueled by concerns over potentially problematic loans.
President Donald Trump’s remarks on trade policy also influenced the market. Trump told Fox News that the very high tariffs imposed on Chinese imports are not sustainable, which eased some concerns about U.S.-China trade tensions. He also stated he would meet with China’s leader, Xi Jinping, at an upcoming conference in South Korea, following earlier uncertainty about such a meeting.
Among the banks that saw notable changes, Zions Bancorp rose 5% after a significant drop the previous day, which was triggered by the bank charging off $50 million in loans due to “apparent misrepresentations and contractual defaults” by borrowers. Western Alliance Bancorp gained 2% after experiencing a 10.8% loss on Thursday; the bank is involved in a lawsuit against a borrower over fraud allegations.
The financial sector’s stability remains in question after last month’s bankruptcy filing by First Brands Group, an auto parts supplier, which has heightened scrutiny of loan quality across the industry. Jefferies Financial Group, which could be affected by First Brands’ bankruptcy, increased 5.9% on Friday but had previously lost about 30% of its value since mid-September.
JPMorgan CEO Jamie Dimon addressed these concerns on an earnings call, saying, “When you see one cockroach, there are probably more. Everyone should be forewarned on this one.” Brian Jacobsen, chief economist at Annex Wealth Management, commented, “But banks make loan loss provisions and typically have plenty of capital to keep the cockroaches from causing structural damage. Based on earnings and data so far, it looks like this isn’t an infestation and that the potential canary in the coal mine is probably passed out and not dead.”
In the bond market, Treasury yields steadied after a sharp drop on Thursday, with the 10-year Treasury yield edging up to 4.00% from 3.99%. Gold prices also retreated from recent highs, falling 2.1% to $4,213.30 per ounce, though they remain up about 60% for the year, driven by expectations of Federal Reserve interest rate cuts and concerns over global government debt.
Overseas, stock indexes in Europe and Asia fell in response to Wall Street’s earlier weakness, with Germany’s DAX down 1.8% and Hong Kong’s Hang Seng dropping 2.5%.
