After days of violent swings, U.S. markets ended the week on steadier ground. The late-Friday rebound came as investors weighed encouraging signals from the White House and a surprisingly solid batch of bank earnings that briefly calmed fears of a wider financial storm.
The S&P 500 and Nasdaq 100 both edged higher – up roughly 0.3% and 0.4%, respectively – trimming losses from earlier sessions. The VIX, Wall Street’s fear gauge, slipped toward 23, hinting at a tentative return to composure after one of the most unpredictable stretches of the fall season.
At the center of the recovery was President Donald Trump’s attempt to soften his stance on China. In an interview with Fox Business, he admitted that the heavy tariffs his administration had floated were “not sustainable,” a comment that traders interpreted as a signal of de-escalation. Markets, which had been rattled by the prospect of 100% import duties, quickly clawed back some confidence.
Banking Sector Offers Rare Good News
The rally found another tailwind from the financial sector. A round of upbeat reports from regional banks helped stem panic that had spread after Zions Bancorp and Western Alliance revealed massive fraud-linked losses earlier in the week.
Earnings from Truist Financial and Fifth Third Bancorp showed smaller-than-feared provisions for bad loans, sending shares higher at the open. That was enough to stabilize the S&P Regional Banks Index, which had plunged more than 6% on Thursday in its worst one-day performance since spring.
Still, the relief may prove temporary. “The credit boom of the past two years has created vulnerabilities that could take months to surface,” warned Kathleen Brooks, research director at XTB. “If we start seeing a wave of write-downs, regional lenders could once again be under strain, much like they were during the Silicon Valley Bank collapse in 2023.”
October’s Market Mood Swings
This week’s volatility reinforced October’s reputation as one of the stock market’s most unpredictable months. The S&P 500 remains near record highs, but traders are bracing for more turbulence as earnings season accelerates and the U.S.–China trade dispute continues to loom large.
“After a remarkably calm summer, October has brought back the chop,” wrote Keith Lerner, chief market strategist at Truist Advisory Services. “Equity swings are widening, and the cracks in investor optimism are starting to show.”
Corporate Highlights
Elsewhere, Eli Lilly came under pressure after Trump said the price of Ozempic, its best-selling diabetes drug, could fall to about $150 a month, raising concerns about potential regulatory pressure on pharmaceutical profits.
CSX Corp. bucked the trend with stronger-than-expected revenue, while Micron Technology slid following reports that it would stop supplying certain chips to Chinese data centers amid trade restrictions.
By the closing bell, Wall Street had managed to turn a week of panic into a cautious rebound – one built on fragile optimism that trade tensions won’t reignite and that banks, for now, can weather the credit storm.
