Stocks Rise as Trump Says China Talks Doing Well: Markets Wrap

(Bloomberg) -- Wall Street volatility abated at the end of a jittery week after President Donald Trump’s remarks soothed anxiety around trade tensions while regional banks climbed. Bonds and gold fell.

Stocks rose as Trump said the US is doing well in negotiations with China, adding that it looks like his meeting with President Xi Jinping is going forward. The rebound in equities was also fueled by solid results from some regional banks a day after concern about credit quality in the economy sent the shares plunging. Oracle Corp. sank on concerns about fulfilling AI cloud demand.

“October has brought a spooky uptick in market swings,” said Keith Lerner at Truist Advisory Services. “After an extended rally and elevated investor sentiment, markets were vulnerable to negative surprises. We would view deeper pullbacks as opportunities to lean in, as the bull market still deserves the benefit of the doubt.”

After a week when fears about escalating trade tensions between Washington and Beijing fueled sharp market swings, Trump also said current tariffs on China were “not sustainable.” The remarks signaled an effort by Washington to calm fears of a global downturn and a cutoff in trade between the two economies. 

Over $3.4 trillion worth of options will expire Friday, according to Goldman Sachs Group Inc. The dollar wavered, but was set for its worst week since August. Gold fell from a record. Silver slid 5%.

“As well as ongoing trade war uncertainty between the US and China, sluggish global growth and stretched valuations, credit risk in US regional banks has added to the list of growing worries,” said Fawad Razaqzada at City Index and Forex.com. “But all it would take is a social media post by Trump to flip trigger a bullish reversal in risk appetite.” 

For that reason, he’s “bit skeptical” about a sharp correction. Dip-buying has been a key theme in stock markets throughout 2025, and Razaqzada expects that to continue.

Despite all the uncertainties that shook markets this week, stocks actually got big inflows as investors put cash to work.

Equity funds drew $28.1 billion while cash had $24.6 billion outflows for the week ended Oct. 15, Bank of America Corp. said, citing EPFR Global data.

Another factor that has unsettled traders in recent days is the US government shutdown, which has frozen a whole swath of key releases.

Applications for US unemployment benefits fell last week, according to analyses of unadjusted state-level filings released during the federal shutdown.

Initial claims decreased to about 215,000 in the week ended Oct. 11 from an estimated 234,000 in the prior week, according to a Bloomberg News analysis of the figures. Goldman Sachs Group Inc. economists also saw a decline, estimating initial jobless claims totaled about 217,000 last week.

Even with little sign of resolution on the shutdown front, recent commentary from Federal Reserve speakers has spurred investors to add dovish exposure.

Fed Bank of St. Louis President Alberto Musalem said he could support another rate reduction to bolster a slowing labor market, but emphasized officials should make decisions meeting by meeting given economic uncertainty.

“The lack of economic data does not seem to be a problem for the Fed and we expect another 25-basis-point rate reduction at the October meeting,” Morgan Stanley economists led by Michael Gapen said in a note.

Looking ahead, TD Securities strategists expect the September consumer price index due Oct. 24 to show that core inflation lost modest speed, as cooling services prices — led by housing — offset a likely acceleration in goods inflation that reflects more tariff passthrough.

“There remain many reasons to be bullish on the market,” said Nicholas Bohnsack at Strategas. “Perhaps chief among them, corporate profits have continued to follow through on estimates that have also been generously revised higher after the post-Liberation Day shake off.” 

“Although the equity bull market is now entering its fourth year, we believe it has further to run,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.

Her firm upgraded equities to “attractive” this month, citing fresh momentum behind the artificial-intelligence trend, supportive Fed policy and a better US growth outlook.

“So, we think investors should review current allocations to equities and ensure they are at least consistent with, or modestly higher than, their long-term strategic asset allocation targets,” she said. “If investors are currently underallocated to equities, we believe they should reallocate excess cash, bond, or high yield credit holdings toward stocks.”

Charles Schwab Corp.’s chief executive officer said retail investors are eager to trade when there is more volatility.

“Our clients trade more when there is more volatility, and they tend to be somewhat countercyclical,” Schwab CEO Rick Wurster said Friday in a Bloomberg Television interview. “The last few weeks, they’ve been buying dips and selling rips.”

Corporate Highlights:

• Oracle Corp. sank after giving its long-range financial outlook, suggesting investors anticipated a bigger boost from its investment in AI infrastructure.
• American Express Co. reported earnings that beat expectations after unveiling the long-anticipated Platinum credit card refresh last month.
• Morgan Stanley is seeking to raise about $7.5 billion from selling investment-grade bonds, according to people with knowledge of with the matter, the third such deal by a major Wall Street firm this week following the release of third-quarter results.
• Ally Financial Inc. reported third-quarter earnings that topped estimates as the firm saw continued demand for car loans despite questions about consumer health in auto lending.
• Novo Nordisk A/S and Eli Lilly & Co. shares fell after President Donald Trump said the price of the blockbuster diabetes drug Ozempic could come down to just $150 a month.
• CME Group Inc. is planning to debut financial contracts tied to both sports games and economic indicators by the end of the year, according to people familiar with the matter.
• OpenAI has paused depictions of Martin Luther King Jr. after users generated “disrespectful” deepfake videos of the civil rights leader using its artificial intelligence tool Sora.
• Newcleo Ltd., a struggling UK nuclear startup, has agreed to invest as much as $2 billion to develop uranium fuel facilities in the US with American reactor developer Oklo Inc., a move aimed at expanding the supply chain for the fledgling small-reactor sector.
• Porsche AG is in talks with Michael Leiters, the former head of McLaren Automotive Ltd., to take over as chief executive officer and turn around the struggling 911 maker.
• Man Group Plc, the world’s largest publicly traded hedge fund, saw its assets soar to a record in the three months through September, as clients poured more money into long-only products and performance improved.
• Verisure Plc reported a data breach to the Swedish police after information stored on third-party systems was accessed by an unauthorized party, just over a week after the firm’s blockbuster Stockholm IPO.
• Suez SA, a French water and waste-treatment company partly owned by BlackRock Inc., has paused a process to sell Chinese assets as it wants to keep growing in the world’s second-largest economy for longer, people familiar with the matter said.
• Cambricon Technologies Corp. reported a 14-fold surge in quarterly revenue, one of the starkest signs yet of how China’s chipmakers are benefiting from a national drive to replace restricted Nvidia Corp. gear during a domestic AI development boom.
• BYD Co., the world’s largest EV manufacturer, is recalling over 115,000 vehicles in its crucial home market due to technical defects, raising concerns about quality control in the Chinese giant’s rush to keep costs down.
• Reliance Industries Ltd.’s quarterly profit fell short of expectations, as weakness in its petrochemical business offset gains in refining and consumer units.

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What Bloomberg Strategists Say...

“Yes, credit jitters are back, but this looks more like an unexpected stress test than a systemic shock. Congratulations, we may have just survived the two-day regional banking crisis of 2025.”

—Brendan Fagan, FX Strategist, Markets Live. Read more here.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.6% as of 2:39 p.m. New York time
• The Nasdaq 100 rose 0.7%
• The Dow Jones Industrial Average rose 0.6%
• The MSCI World Index rose 0.2%
• Bloomberg Magnificent 7 Total Return Index rose 1%
• The Russell 2000 Index fell 0.6%
• SPDR S&P Regional Banking ETF rose 1.5%
• Zions rose 5.9%
• Western Alliance rose 2.1%
• Oracle fell 6.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.1% to $1.1672
• The British pound was little changed at $1.3438
• The Japanese yen was little changed at 150.47 per dollar

Cryptocurrencies

• Bitcoin fell 0.8% to $106,977.56
• Ether fell 0.2% to $3,846.11

Bonds

• The yield on 10-year Treasuries advanced two basis points to 4.00%
• Germany’s 10-year yield advanced one basis point to 2.58%
• Britain’s 10-year yield advanced three basis points to 4.53%
• The yield on 2-year Treasuries advanced three basis points to 3.46%
• The yield on 30-year Treasuries advanced one basis point to 4.60%

Commodities

• West Texas Intermediate crude rose 0.3% to $57.61 a barrel
• Spot gold fell 1.9% to $4,242.78 an ounce

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