The Dow Jones Industrial Average was essentially flat on Friday as traders sought to move past credit concerns that triggered a sharp sell-off in regional banks on Thursday.
The index traded 14 points higher, or less than 0.1%, while the S&P 500 shed 0.2% and the Nasdaq Composite fell 0.4%.
Stocks that led Thursday’s banking sell-off were rebounding in early trading.
Zions Bancorp and Western Alliance had disclosed bad loans over the prior 48 hours, triggering steep declines Thursday—Zions lost 13% and Western Alliance fell 11%.
On Friday, Zions climbed more than 4% after Baird upgraded the stock, citing an overreaction to the potential loan losses.
Jefferies, which was caught up due to exposure to bankrupt auto parts retailer First Brands, rose nearly 5% after Oppenheimer upgraded it to outperform.
Better-than-expected earnings from Fifth Third Bancorp eased investor concerns, sending the stock up 2% in early trading, despite the bank posting higher credit losses tied to bankrupt subprime auto lender Tricolor.
Major banks that had weighed on Thursday’s session, including J.P. Morgan and Bank of America, also moved higher.
Thursday had seen the Dow lose 300 points and the S&P 500 drop 0.6%, driven by the regional banking slump.
The SPDR S&P Regional Banking ETF (KRE) declined more than 6%, marking four consecutive weeks of losses.
Early Friday, the ETF rebounded 2% as investors judged the credit issues to be largely idiosyncratic.
“We don’t think there are systemic credit problems for banks—most of what we’re seeing so far is a function of a few specific situations (First Brands and TriColor), while credit quality broadly, if anything, is tracking better than anticipated,” Adam Crisafulli of Vital Knowledge noted.
US-China trade tensions
US President Donald Trump said Friday that the proposed 100% tariff on Chinese goods is not intended to be permanent.
“It’s not sustainable, but that’s what the number is,” Trump told Fox Business Network. “They forced me to do that.”
Trump confirmed he would meet Xi in two weeks and expressed optimism about the talks, saying he believed “things will be fine with China.”
“I get along great with him,” Trump said of Xi in the interview. “I think we’re going to be fine with China, but we have to have a fair deal. It’s got to be fair.”
On October 10, Trump announced the 100% tariff on Chinese goods, effective November 1, saying in a Truth Social post that the move was in response to China’s “unprecedented position.”
The president also said the US would impose export controls on “any and all critical software.”
Treasury Secretary Scott Bessent is expected to hold a phone call on Friday with Chinese Vice Premier He Lifeng to discuss ongoing trade negotiations, according to a CNBC report.
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