US stocks advanced on Wednesday, buoyed by stronger-than-expected corporate earnings that outweighed renewed concerns over trade tensions with China.
The Dow Jones Industrial Average climbed 161 points, or 0.3%. The S&P 500 gained 0.7%, while the Nasdaq Composite advanced 1%.
Bank of America shares jumped 4% after reporting third-quarter earnings and revenue that exceeded analyst expectations, supported by a rebound in investment banking.
Morgan Stanley also posted stronger-than-anticipated results, lifting its stock by 7%.
The upbeat reports followed solid earnings from Goldman Sachs and Wells Fargo earlier in the week.
US-China tensions continue to test market sentiment
Tuesday’s session was marked by sharp swings as trade tensions intensified between Washington and Beijing.
The S&P 500 initially attempted a rebound but closed lower after President Donald Trump threatened to impose a cooking oil embargo on China in retaliation for its reduced purchases of US soybeans.
The index was up as much as 0.4% and down as much as 1.5% during the session.
The Nasdaq also fell but recovered from its intraday lows, while the Dow managed to close higher by just over 200 points after having been down as much as 1.3% earlier in the day.
The escalation came after China announced new sanctions on five US subsidiaries of South Korean shipbuilder Hanwha Ocean.
The move followed Trump’s earlier warning that the US could impose a 100% tariff on Chinese goods after Beijing tightened export controls on rare earth minerals.
JPMorgan expects the tension to ease following a planned meeting between the U.S. and China later this month.
“We continue to expect talks between Trump and Chinese President Xi at the upcoming Oct 31–Nov 1 APEC meetings in South Korea,” wrote Abiel Reinhart of JPMorgan on Tuesday.
Reinhart said the likely outcome would be a pause on additional tariffs and more flexible export controls from both sides, avoiding a full-blown embargo.
Treasury Secretary: US trade policy won’t be swayed by markets
Treasury Secretary Scott Bessent reaffirmed that the US will not alter its trade negotiating strategy in response to market volatility.
“We won’t negotiate because the stock market is going down,” Bessent said in an interview at CNBC’s Invest in America Forum.
“We will negotiate because we are doing what is best economically for the US.”
He also dismissed a Wall Street Journal report suggesting that Chinese President Xi Jinping believes the US economy cannot withstand a prolonged trade conflict.
Bessent called the report “terrible,” accusing the publication of taking “CCP dictation.”
Despite ongoing trade uncertainties, investors appeared to focus on corporate fundamentals midweek, helping major indexes regain some ground lost in the previous session.
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