What we covered here
• Wall Street rebounded Friday despite rising US-China trade tensions, concerns about historically expensive stocks and brewing trouble in the banking industry.
• US stocks ended the day higher following a tumble yesterday as jitters spread about credit market turmoil and regional banks’ exposures to bad loans.
• CNN’s Fear and Greed index has dipped into “extreme fear” for the first time since April.
Stocks close higher to wrap up volatile week on Wall Street
US stocks closed higher on Friday as investors tried to look past concerns about credit market turmoil and instead embraced optimism that Washington and Beijing might de-escalate trade tensions.
The Dow gained 238 points, or 0.52%. The broader S&P 500 rose 0.53%, and the tech-heavy Nasdaq Composite gained 0.52%.
Wall Street’s fear gauge, the VIX, sank 15% as President Donald Trump took a softer tone on trade tensions with China during remarks at the White House.
“I think we’re doing very well,” Trump said. “I think we’re getting along with China.”
Gold and silver —safe havens during uncertainty — fell 1.5% and 5.4%, respectively, pulling back from record highs and putting a pause on a recent rally. Gold still posted its best week since April as investors scooped up safe havens.
Shares of Jefferies (JEF), Zions Bancorp (ZION) and Western Alliance Bancorp (WAL) rose 5.94%, 5.84% and 3.07%, respectively. The shares were coming off their worst day in six months, and investors bought the dip as some Wall Street analysts said credit issues appeared to be contained.
“October has brought a spooky uptick in market swings, driven by trade tensions and isolated credit concerns among regional banks,” Keith Lerner, chief market strategist at Truist, said in a note.
“Despite an ongoing carousel of concerns, the bull market still deserves the benefit of the doubt,” Lerner said.
Stocks are rising ahead of the closing bell
Wall Street is set to end a whirlwind week with modest gains.
The Dow was up 315 points, or 0.68%, as of Friday afternoon. The S&P 500 and tech-heavy Nasdaq each rose 0.65%.
Stocks climbed higher as investors maintained optimism about a potential de-escalation in US-China trade tensions. President Donald Trump said early Friday that triple-digit tariffs would be “not sustainable.”
“I think we’re getting along with China,” Trump said later at the White House.
“Trump put worked to stabilize angst on Wall Street, as the president delivered a conciliatory message regarding Washington’s trade conflict with Beijing,” José Torres, senior economist at Interactive Brokers, said in a note.
Wall Street’s fear gauge, the VIX, sank 11% after briefly hitting its highest level since April this morning.
“The markets are looking beyond the noise, so to speak, but investors are still on the lookout for policy surprises,” said Doug Beath, global equity strategist at Wells Fargo Investment Institute.
“Markets are going to remain sensitive to policy surprises,” he said.
Gold futures dipped lower on Friday but were on track to finish the week with a gain of 6.4%, posting their best week since April. Gold prices have surged 61% this year as investors have rushed into safe havens.
The five big "What if" moments behind Wall Street's angst
The stock market is sending mixed signals at the moment. Here are the five separate narratives controlling the action:
Banks: A number of high-profile bankruptcies in consumer-facing industries may have exposed an underlying economic weakness that raises risk for the banking sector (and anyone involved).
Trade: President Donald Trump threatened a major re-escalation of the global trade war, then mostly walked that back. But tensions remain between the world’s two largest economies.
AI: Frothy Big Tech stocks signal that valuations have gotten out of whack with reality, and that AI-powered gains are due for a serious reality check. That could mean a massive downturn in the market.
Fed moves: Stagflation — high inflation and stagnant economic growth — could become a real concern as Trump’s tariffs work their way through the economy. That could mean higher inflation, an even softer labor market, or even a recession.
Making the most of it: Stocks are down just about 2% from their record high. If they fall further, that could present a good buying opportunity to get back into the market when stocks are relatively cheap.
Read more here.
Wall Street wraps up volatile week on a quiet note
US stocks were higher Friday midday, reversing course one day after jitters about bad loans sent regional bank stocks sliding.
The Dow gained 197 points, or 0.43% by early afternoon. The broader S&P 500 gained 0.35% and the tech-heavy Nasdaq Composite gained 0.3%.
Wall Street’s fear gauge, the VIX, sank 8%, but still traded at its highest level since May.
There was a wave of dip buying in markets. Shares in Jefferies (JEF), Zions Bancorp (ZION) and Western Alliance Bancorp (WAL) rose 5%, 4% and 1.4%, respectively.
While fears of credit market turmoil spiked on Thursday after Zions and Western Alliance disclosed issues with borrowers, some strategists said they are not concerned about a broader spillover.
“While both events are reportedly fraud-related, we believe these credit issues are idiosyncratic and not indicative of a broader weakening of credit trends,” Ulrike Hoffmann-Burchardi, global head of equities at UBS, said in a note.
Markets had started the day lower but moved higher Friday morning after President Donald Trump took a softer tone on tariffs. While regional bank loans are drawing investors’ focus, stocks are still sensitive to developments in US-China trade tensions.
CNN’s Fear and Greed index hovered between “fear” and “extreme fear.”
Stocks are flat
US stocks were mixed Friday morning as investors shrugged off concerns and bought the dip.
The Dow was up 62 points, or 0.14%. The broader S&P 500 was flat, and the tech-heavy Nasdaq Composite fell 0.1%.
Just over half of companies in the Dow and S&P 500 were trading higher.
Shares in Jefferies (JEF) and Zions Bancorp (ZION) rose 6.7% and 5.2%, respectively.
Gold and silver futures sank 1.7% and 5.4%, respectively, after record-breaking rallies in recent weeks.
CNN’s Fear and Greed index moved from “extreme fear” into just “fear.”
Wall Street has a witches' brew of concerns
Markets are caught up in a tangle of overlapping anxieties that some see as echoes of the dot-com bubble in the late 1990s that went bust in the early 2000s.
Big Tech and the promise of AI have fueled the historic rise in stocks this year, but analysts have warned in recent months that this is a one-legged stool – and AI companies’ high valuations can’t support the market forever.
Add to that the growing unease about the economic impact of President Donald Trump’s tariffs. Consumers are jostled by rising prices, with delinquencies and subprime debt rising for lower-income tiers. Trade with the United States has slowed due to higher tariffs, and China has accused the United States of torpedoing efforts to resolve the trade war between the world’s two largest economies.
Geopolitical flashpoints remain in Ukraine and the Middle East, but markets remain optimistic about meetings lined up between Trump and his Chinese counterpart; and with Russia’s President Vladimir Putin. Worry about oversupply has pressured the oil market, with the price of Brent and WTI both at near five-month lows.
All these concerns intersect with broader economic jitters about softer US job growth and stubborn inflation that are putting anticipated Federal Reserve rate cuts at risk.
And now, the questions swirling about lower lending standards in the banking sector are exacerbating the overall gloomy mood on Wall Street. Industry leader Jamie Dimon, CEO of JPMorgan Chase, warned this week of underlying peril in the market, saying that once you see one cockroach, that usually means there are more hiding.
Global markets were sharply lower Friday, while the major US indexes look mostly set to rebound from their earlier lows, revealing fragile optimism amid the bearish sentiment.
Trump casts doubt on the massive China tariffs he threatened
President Donald Trump said Friday he doesn’t view tariffs north of 100% on Chinese exports as a long-lasting policy.
“It’s not sustainable, but that’s what the number is,” Trump said in a phone interview with Fox Business. This comes a week after he said he’d slap an additional 100% tariff on Chinese goods next month on top of the 30% minimum rate currently in effect.
Trump’s move was prompted in part by new restrictions China put on rare earth exports, which he claimed was a violation of the trade agreement his administration brokered.
“They forced me to do that,” Trump added, referring to the tariffs.
Still, he said he’s optimistic things will be resolved more amicably.
Stocks are mixed after Trump says China tariffs "not sustainable"
It’s been a whipsaw morning on Wall Street.
US stocks opened mixed Friday morning as investors digested a myriad of concerns including nerves about turmoil in credit markets and ongoing US-China trade tensions.
Stock futures were trading sharply lower earlier before turning higher after President Donald Trump said in an interview with Fox Business that triple-digit tariffs on imports from China would be “not sustainable.”
The Dow gained 100 points, or 0.22%. The broader S&P 500 fell 0.1% and the tech-heavy Nasdaq Composite fell 0.3%.
Wall Street’s fear gauge, the VIX, fell 5% after briefly hitting its highest level since April.
“Risk sentiment remains fragile,” said Mohit Kumar, chief economist and strategist for Europe at Jefferies. “We remain in a low-risk mode for now, as we expect near-term volatility, but are keeping our powder dry and ready to buy the dip.”
“Extreme fear” was the sentiment driving markets, according to CNN’s Fear and Greed index.
Elsewhere in markets, bitcoin slid 5% in the past day and traded around $105,500 as of Friday morning.
Bessent set to discuss trade with top Chinese official today
Treasury Secretary Scott Bessent is scheduled to speak on Friday with China’s Vice Premier He Lifeng, a senior administration official told CNN.
The two officials are expected to discuss ongoing US-China trade talks, the official said.
It’s not clear what time the call is scheduled for. But the call, previously reported by CNBC, comes at a sensitive time.
Fear has returned to Wall Street this month, first over worries about the US-China trade war reigniting and then about bad loans by US lenders to the US banking sector.
President Donald Trump rocked markets a week ago by threatening to slap massive tariffs on China on November 1 in response to Beijing unleashing sweeping export controls on critical rare earth minerals.
Trump later said the United States would like to “help China, not hurt it.”
“Don’t worry about China, it will all be fine!” Trump said.
Hassett says Trump administration can "stay way ahead of the curve" on banking woes
America’s banking sector has “very ample reserves,” Kevin Hassett, director of the National Economic Council, said Friday in an interview with Fox Business, brushing off Wall Street’s concerns about the industry.
“We’ve got really talented, top-notch people in place cleaning things up right now, and so we’re very optimistic that we can stay way, way, way ahead of the curve on this,” he told Fox’s Maria Bartiromo.
“We had an almost serious crisis with SVB, and we’ve got other things that are kind of like messes that the Biden has left us that we need to clean up,” Hassett said, referencing the collapse of Silicon Valley Bank in 2023, when the federal government had to step in to guarantee customer deposits after a rush on the bank.
“We’ve got the very best people on earth working on it, people like [Federal Reserve Vice Chair for Supervision] Miki Bowman and Scott Bessent at Treasury. And so we think that the market should recognize that there’s a new team in town, and this team is going to clean up the mess that the Biden has left us,” Hassett said.
Wall Street is worried about bad loans. Main Street should care too
Wall Street’s bad loan jitters are inextricably linked to Main Street.
The trouble started last month when subprime auto lender Tricolor imploded.
That episode underscored the struggles of Main Street, where hiring is low and prices are high. A growing number of Americans are falling behind on their car loans.
Investment bank Jefferies has been caught up in a different bankruptcy – an auto supplier that sold oil filters and windshield wipers to consumers at Walmart and other retailers.
Regional banks Zions and Western Alliance say they lent to businesses that may have defrauded them.
Investors are left wondering: What other bad loans are out there? Has there been too much lending to too many weak companies? And what would all that debt look like in an eventual downturn?
Bottom line: If banks and major players in the private credit boom suffer further losses, it’ll give them less firepower to lend to healthy consumers, small businesses and corporations at the heart of the Main Street economy.
Jamie Dimon warns of "cockroaches" in the US economy
As the Great Financial Crisis showed, trouble on Main Street can start in obscure corners of Wall Street.
JPMorgan Chase CEO Jamie Dimon, whose bank rescued Bear Stearns when it nearly collapsed in 2008, cautioned this week that trouble could be lurking again beneath the red-hot markets.
First, a subprime auto lender and dealer went bust last month in a crash fueled by plenty of risky loans and, allegedly, “pervasive fraud” of “extraordinary proportion,” a lawyer said in court.
Then First Brands, an auto-parts supplier built on complex and hidden loans, blinded Wall Street with a bankruptcy to which financial firms are highly exposed.
“My antenna goes up when things like that happen,” Dimon told analysts during a call on Tuesday. “And I probably shouldn’t say this, but when you see one cockroach, there are probably more… Everyone should be forewarned on this.”
Read more here.
Global markets sink
European stocks slumped Friday, dragged down by banking stocks, as concerns about the health of regional US banks spread globally.
Germany’s DAX slumped 2%, France’s CAC 40 shed 0.7% and Spain’s IBEX lost 0.9%. The FTSE 100 index fell 1.5%.
Deutsche Bank tumbled 6.4%, BNP Paribas fell 3.9%, Barclays slumped 5.2% and Italy’s UniCredit dropped 3.2%.
Asian stock markets fell sharply overnight. The Shanghai Composite Index fell 2%, Hong Kong’s benchmark Hang Seng Index shed 2.5%, and Japan’s Nikkei 225 index fell 1.4%.
Traders snapped up German government bonds, seen as safe investments, early on Friday. The yield – or expected return – on benchmark 10-year Bunds hit its lowest level in almost four months at 2.523%, according to Reuters, before paring losses later in the day. By 7:34 a.m. ET, the bond prices were little changed compared with Thursday.
Traders flock to safe havens
Traditional safe-haven bets have surged to record highs as traders grow fearful about taking on risk in an uncertain economy.
Gold surged 0.7% to $4,330 Friday, yet another record. Silver fell 1% after hitting its first record high in 40 years.
US Treasury bond yields, which trade in opposite direction to prices, fell as investors sought the relative safety of government-backed debt. The benchmark 10-year Treasury yield fell below 4% recently and hasn’t been this low since the tariff crisis in April.
Meanwhile, riskier assets like stocks continued to fall, and investors continued to dump crypto. Bitcoin fell to $106,000, its lowest level since July.
And oil fell again Friday, sinking below $57 for the first time since 2021 in part on fears that the economy may be in the midst of a serious downturn. A recent report from the International Energy Agency warned that the world was oversupplied with crude.
Why fear is spreading on Wall Street
Several financial groups are wrestling with bad loans, raising worries on Wall Street of more to come.
For weeks, investors have focused on Jefferies Financial Group, an investment bank that has at least $45 million worth of exposure to First Brands, an auto-parts supplier that filed for bankruptcy last month. But on Thursday, they turned some of their attention to two regional banks, Western Alliance Bancorp and Zions Bancorp, after concerns about some of their loans as well.
All three banks’ stocks suffered their steepest single-day losses in over six months on Thursday.
Each of the bad loans very well may prove to be unique – their circumstances vary widely, and it’s not yet clear that they pose a greater risk to the broader market, banking industry or economy. However, investors have grown increasingly anxious about the drip-drip-drip of bad news, and they fear that enough similarities exist between the various pieces of bad news to at least start selling off some of their riskier holdings.
Still, markets haven’t exactly been crumbling. The S&P 500 is down less than 2% from its all-time high. CNN’s Fear and Greed Index may be trading in extreme fear for the first time since April, but it’s not yet apparent that dominoes will continue to fall – or if they’re even big enough to bring down any big and consequential pieces.
For now, though, Wall Street remains a bundle of nerves.
Stocks are set to fall again
US stocks look like they’re in for another rough day, at least to start, as Wall Street grows increasingly fearful about a growing number of enormous bank loans that went bad in recent weeks, exposing potential underlying risk in the banking system.
Dow futures were down 100 points, or 0.2%, Friday morning. S&P 500 futures were 0.4% lower, and the tech-heavy Nasdaq was set to fall 0.6% at the open.
On Thursday, regional bank Zions’ report of a $50 million loan loss sent the Dow sinking more than 300 points. Wall Street finance titan Jefferies’ stock tumbled 10% Thursday and has fallen 27% over the past three weeks after it revealed a massive, $45 billion exposure to the sudden bankruptcy of auto parts company First Brands. And Western Alliance Bancorp on Thursday said it filed a lawsuit against a borrower it accused of fraud.
Stocks, which were at record highs just a week ago, have grown highly volatile in recent days. The VIX volatility index, which spiked 23% Thursday, rose another 5% Friday and is at its highest level since President Donald Trump unveiled his massive tariff plan in April.
