Wall Street Rebounds as Trump Adopts Softer Stance on China Trade

Wall Street stocks rebounded on Friday after U.S. President Donald Trump struck a more conciliatory tone towards China, easing fears of escalating trade tensions. At the same time, concerns over regional banks subsided, lifting overall market sentiment.

In an interview with Fox Business, President Trump confirmed he would meet Chinese President Xi Jinping at the upcoming APEC summit in South Korea, reversing last week’s threat to cancel the talks.

Trump, who had recently warned of imposing steep tariffs in retaliation for China’s rare-earth export restrictions, acknowledged that “the higher tariffs were not sustainable.”

This shift in tone signalled potential easing in trade hostilities, offering relief to investors worried about global market volatility.

Regional banks — the centre of Thursday’s sell-off — staged a sharp recovery. Shares of Zions Bancorp (Salt Lake City) and Western Alliance Bancorporation (Phoenix) rose significantly after being hit by losses linked to troubled commercial loans.

Market analyst Chris Beauchamp of IG commented:

“It was all set to be another frantic Friday for markets as a U.S. regional bank crisis appeared on the horizon, but comments from President Trump have once again lifted equities off their lows.”

Analysts said Thursday’s panic might have been “overdone”, though concerns persist regarding transparency in private credit and private equity sectors, according to David Morrison of Trade Nation.

Despite Wall Street’s rebound, European and Asian markets closed lower amid continued economic uncertainty.
European bank stocks were particularly hit, with sharp declines recorded in Deutsche Bank (-6%), Societe Generale (-5%), and Barclays (-5.7%).

Currency and Commodities Snapshot

Adding to market uncertainty, U.S. lawmakers remain deadlocked over ending the ongoing government shutdown, delaying the release of key economic data used by the Federal Reserve to guide monetary policy.

However, investor confidence received mild support from expectations that the Fed could cut interest rates again later this year to sustain economic momentum.