U.S. Markets Volatile Week

U.S. Markets Volatile Amid Bank Concerns and Trade Tensions

U.S. markets experienced a week of ups and downs, with concerns about regional banks and the U.S.-China trade dispute taking centre stage. Zions Bancorp and Western Alliance Bancorp revealed potential credit fraud linked to distressed real estate funds, while Ally Financial reported strong demand for auto loans. Meanwhile, American Express shareholders celebrated a 6.8% gain following an outlook raise.

The week began with worries about U.S. regional banks, which weighed on Wall Street. However, Truist Financial, Regions Financial, and Fifth Third Bancorp later reported lower provisions for credit losses than anticipated, easing investor concerns.

The AI rally had stalled, and the U.S.-China trade dispute escalated, adding to investor worries. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer held a video call with Chinese Vice Premier He Lifeng, agreeing to new economic and trade consultations. President Donald Trump expressed hope for a fair agreement, acknowledging the current tariff rate on Chinese imports as 'not sustainable'.

Zions Bancorp and Western Alliance recovered somewhat on Friday, trading up 4.3% and 1.8% respectively, after initially announcing potential credit fraud linked to distressed real estate funds.

Despite the volatility, Ally Financial reported strong numbers, indicating sustained demand for auto loans and easing concerns about lower-income consumers. American Express shareholders also gained 6.8% following an outlook raise. Experts warned against extrapolating the problems to the entire banking sector, as the market awaits further developments in the U.S.-China trade dispute.