US stocks heave a sigh of relief after Trump allayed trade fears and regional bank results

U.S. stock indexes rose on Friday at the end of a volatile week, with President Donald Trump trying to calm concerns about the trade war with China, while a batch of strong regional bank results helped bring calm to a banking sector that has seen recent turmoil. The Standard & Poor’s 500 (S&P 500) rose 0.3% after swinging between gains and losses during the session, while the tech-heavy Nasdaq 100 gained 0.4%. The fear “volatility” index, known as “VIX,” fell slightly to around 23 points. Fears of easing in US-China trade war Trump said in an interview with Fox Business that the high tariffs he has threatened to impose on China “will not last,” allaying fears of further escalation in the trade dispute between the two countries. Trump: High US tariffs on China will not last. Meanwhile, U.S. bank stock prices stabilized with the release of a new set of regional bank results that helped ease concerns about credit quality, heightened as Zions Bancorp and Western Alliance Bancorp revealed they were… Two victims of fraud. The Standard & Poor’s 500 index is still near its all-time highs and is headed for weekly gains. However, investors said recent volatility could continue given the lingering trade dispute with China, the third-quarter earnings season entering its peak and October’s reputation as a month of high volatility for stocks. “After braving seasonal weakness in August and September, markets are now starting to feel the pain of October,” Keith Lerner, chief investment officer at Truist Advisory Services, wrote in a note published Friday. “Volatility has returned, with stock moves widening and patches of weakness emerging in some sectors.” Local US banks Share prices of regional banks stabilized after a sharp drop in Thursday’s session. Recent earnings results helped support the sector, as shares of Fifth Third Bancorp and Truist Financial Corp rose at the open after the two institutions announced lower provisions for credit losses compared to analysts’ expectations. These results helped ease concerns that sent the S&P sectoral index of regional banks down 6.3% on Thursday. As results season continues over the coming weeks, this improvement may be temporary. Kathleen Brooks, research director at XTB, said: “Concern is growing that the rush to loans over the past two years could lead to a wave of bad debt and debt write-offs, which could have a negative impact on the banking sector, as happened with (Silicon Valley Bank) in 2023.” Disturbances in US banks spook global markets. Eli Lilly & Co’s share price falls. After Trump said the price of the well-known diabetes drug Ozempic could drop to $150 a month. CSX Corp shares rose after the transportation company reported third-quarter revenue that topped analysts’ estimates. On the other hand, Micron Technology shares fell after Reuters reported that the company plans to stop supplying server chips to data centers in China.