October 17

Markets Rebound as Trade Tensions Ease

Markets bounced back Monday after fears of escalating U.S.–China trade tensions eased following President Trump’s reassurance to “not worry about China.” Still, the potential for 100% tariffs remains on the table, keeping some investors cautious.

The VIX spiked to its highest level since April this week amid trade concerns and renewed stress in the regional banking sector. Several regional banks disclosed significant loan losses and possible fraudulent borrower activity, sending the sector sharply lower Thursday afternoon and dragging the broader market down. However, both regional banks and major indices rebounded Friday, suggesting investors view these issues as isolated rather than systemic.

Earnings Season Gains Momentum

Earnings season is now in full swing, with major banks posting strong Q3 results driven by resilient trading and credit-card spending despite earlier credit-quality worries.

Looking ahead, Netflix (NFLX) and Tesla (TSLA) headline next week’s reports. Continued strength from large-cap leaders—combined with expectations for Fed rate cuts in October and December—could keep the market’s momentum heading higher into year-end.

Market Outlook

All three major stock market indices closed higher for the week, now sitting just below the all-time highs reached earlier this month.