Wall Street Stabilizes as Bank Stocks Rebound Slightly/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. markets steadied Friday after a rough week, with bank stocks recovering some losses following better-than-expected earnings reports. Tech stocks dragged the broader indexes down slightly, while fears over bad loans remain under scrutiny. Global markets remained volatile, and Treasury yields held steady amid investor caution.
Keyphrase + Quick Looks: Wall Street Bank Recovery Quick Looks
- S&P 500 slightly down; Dow up 91 points
- Nasdaq dips as Big Tech stocks falter
- Banks like Zions and Western Alliance rebound after sharp losses
- Strong Q3 earnings from Fifth Third and Truist ease concerns
- Worries persist over loan quality after First Brands bankruptcy
- Treasury yields steady as investors seek safe havens
- Global markets fall, including Germany’s DAX and Hong Kong’s Hang Seng
Deep Look
Wall Street Stabilizes as Banks Recover, But Market Volatility Persists
NEW YORK (AP) — After a week of rollercoaster trading, Wall Street showed signs of stability on Friday morning, with bank stocks rebounding modestly from the previous day’s sharp losses. Still, the broader market remained volatile as investors weigh corporate earnings, credit risks, and global economic uncertainty.
At the opening bell, the S&P 500 slipped 0.1%, while the Dow Jones Industrial Average gained 91 points (0.2%). The Nasdaq Composite fell 0.3%, dragged down by continued losses in Big Tech stocks, including a 0.6% dip for Nvidia.
Big Tech Slips Under Valuation Pressure
Investors remain cautious about AI-related tech stocks, which have seen significant run-ups in recent months. Companies like Nvidia are being scrutinized for whether their current stock prices reflect realistic earnings potential or are simply inflated by AI hype.
Despite strong revenue growth, concerns over future profitability and valuation led to modest selloffs Friday, putting pressure on the Nasdaq.
Banks Rebound After Sharp Sell-Off
The real story on Friday was the partial recovery of U.S. bank stocks, which had been battered by worries over loan quality. A string of better-than-expected earnings reports from Fifth Third Bancorp, Huntington Bancshares, and Truist Financial helped reassure investors, stabilizing the sector.
Banks at the center of Thursday’s panic also showed gains:
- Zions Bancorp rose 3.4%, bouncing back after a 13.1% plunge. The bank had reported writing off $50 million in questionable loans, citing “apparent misrepresentations and contractual defaults.”
- Western Alliance Bancorp climbed 2.9% following a 10.8% drop. The bank is suing a borrower over alleged fraud.
Meanwhile, Jefferies Financial Group, which could be impacted by the First Brands Group bankruptcy, jumped 4.8%. The investment firm had lost 30% of its market value since mid-September.
Caution Over Credit Quality Grows
The recent Chapter 11 filing by First Brands Group, a supplier of aftermarket auto parts, has raised broader questions about loan quality in the financial system.
JPMorgan CEO Jamie Dimon offered a pointed warning earlier in the week:
“When you see one cockroach, there are probably more.”
While Dimon’s words added weight to the fears, analysts like Brian Jacobsen, chief economist at Annex Wealth Management, said current indicators don’t suggest a systemic problem.
“This isn’t an infestation,” Jacobsen said. “The canary in the coal mine is probably passed out — not dead.”
Geopolitical Jitters Weigh on Markets
Adding to Wall Street’s instability were rising trade tensions after President Donald Trump threatened new tariffs on China. However, markets found some relief after Trump clarified that such steep tariffs would not be sustainable.
Trump also indicated plans to meet with Chinese President Xi Jinping at an upcoming summit in South Korea, easing concerns over escalating trade conflicts.
Global Markets Tumble; Bond Yields Hold
While the U.S. showed early signs of stabilization, international markets slumped:
- Germany’s DAX lost 1.8%
- Hong Kong’s Hang Seng dropped 2.5%
Both markets were impacted by global risk aversion and weak economic signals in Europe and Asia.
In the U.S. bond market, Treasury yields held steady after a sharp drop Thursday:
- The 10-year Treasury yield remained at 3.99%, as investors continued to seek safer assets amid the banking uncertainty.
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