Wall Street rises to finish its best week in 2 months after bank stocks
stabilize
[October 18, 2025] By
STAN CHOE
NEW YORK (AP) — Wall Street cruised to the finish of a winning week on
Friday after banks recovered some of their sharp losses from the day
before.
The S&P 500 rose 0.5%. The Dow Jones Industrial Average added 238
points, or 0.5%, and the Nasdaq composite climbed 0.5%.
The gains capped the best week for the S&P 500 since early August, but
it was a roller-coaster ride. Indexes careened through several jarring
swings as worries built about the financial health of small and midsized
banks, as well as the souring trade relationship between the United
States and China.
Some of the nervousness around U.S.-China trade tensions eased on Friday
after President Donald Trump said that very high tariffs he threatened
to put on Chinese imports are not sustainable.
Trump also told Fox News Channel’s “Sunday Morning Futures” that he
would meet with China’s leader, Xi Jinping, at an upcoming conference in
South Korea. That's counter to an earlier, angry posting he made on
social media, where he said there seemed to be “no reason” for such a
meeting.
Bank stocks, meanwhile, stabilized on Friday after several reported
stronger profit for the latest quarter than analysts expected, including
Truist Financial, Fifth Third Bancorp and Huntington Bancshares. That
helped steady the group, a day after tumbling on worries about
potentially bad loans.
The two banks at the center of Thursday’s action also rose to trim some
of their sharp losses.
Zions Bancorp., which is charging off $50 million of loans where it
found “apparent misrepresentations and contractual defaults” by the
borrowers, climbed 5.8% following its 13.1% loss.
Western Alliance Bancorp, which is suing a borrower due to allegations
of fraud, rose 3.1% after its 10.8% fall on Thursday.
Scrutiny is rising on the quality of loans that banks and other lenders
have broadly made following last month’s Chapter 11 bankruptcy
protection filing of First Brands Group, a supplier of aftermarket auto
parts.
One of the financial firms that could feel pain because of First Brands’
bankruptcy, Jefferies Financial Group, rose 5.9% Friday. It had come
into the day with a loss of roughly 30% since mid-September.
The question is whether the lenders’ problems are just a collection of
one-offs or a signal of something larger threatening the industry.
Uncertainty is high following a long stretch where many borrowers were
able to stay in business, even with the weight of higher interest rates.
And with prices soaring to records for all kinds of investments, the
appetite for risk may have gotten too high.
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A woman with an umbrella passes the New York Stock Exchange, Monday,
Oct. 13, 2025. (AP Photo/Richard Drew)
 JPMorgan CEO Jamie Dimon addressed
the issue on an earnings conference call with analysts earlier this
week.
“When you see one cockroach, there are probably more,” Dimon said.
“Everyone should be forewarned on this one.”
“But banks make loan loss provisions and typically have plenty of
capital to keep the cockroaches from causing structural damage,”
said Brian Jacobsen, chief economist at Annex Wealth Management.
“Based on earnings and data so far, it looks like this isn’t an
infestation” and that the potential canary in the coal mine “is
probably passed out and not dead.”
All told, the S&P 500 rose 34.94 points to 6,664.01. The Dow Jones
Industrial Average climbed 238.37 to 46,190.61, and the Nasdaq
composite gained 117.44 to 22,679.97.
In the bond market, Treasury yields steadied following their sharp
slides from Thursday, which came as investors rushed into
investments seen as safer.
The yield on the 10-year Treasury edged up to 4.00% from 3.99% late
Thursday.
Gold also pulled back from its latest record as more calm seeped
through the market.
The price for an ounce fell 2.1% to $4,213.30, but it’s still up
roughly 60% for the year so far. Besides worries about tariffs,
gold’s price has also surged on expectations for coming cuts to
interest rates by the Federal Reserve and concerns about the massive
amounts of debt that the U.S. and other governments worldwide are
building.
In stock markets abroad, indexes dropped across much of Europe and
Asia after Wall Street’s weakness from Thursday moved westward.
Germany’s DAX lost 1.8%, and Hong Kong’s Hang Seng sank 2.5% for two
of the world’s bigger moves.
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AP Writers Teresa Cerojano and Matt Ott contributed.
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