U.S. Stocks Trade Mixed as Regional Bank Loan Worries Offset Trump’s Trade Remarks
October 17, 2025 — U.S. stocks opened mixed on Friday as Wall Street weighed President Donald Trump’s latest comments on China tariffs against persistent concerns over bad loans at regional banks and broader credit jitters.
The Dow Jones Industrial Average added about 50 points, supported by a mild improvement in sentiment after Trump acknowledged that the 100% tariffs on Chinese imports were “unsustainable.” However, the S&P 500 slipped 0.2%, and the Nasdaq Composite fell 0.4%, with losses concentrated in technology and financial shares.
“It’s not sustainable, but that’s what the number is,” Trump said Friday, referring to the tariffs. “They forced me to do that.”
The remarks briefly eased market fears after a turbulent week dominated by economic and credit concerns. But investors remained cautious, with ongoing stress in regional banks overshadowing broader optimism about U.S.–China trade progress.
Regional Banks Under Pressure
Concerns over U.S. regional lenders deepened Thursday after Western Alliance Bancorp and Zions Bancorp disclosed exposure to loans linked to fraud, sparking sharp sell-offs in financial stocks. Western Alliance shares dropped 11%, while Zions slid 13%.
The news reignited worries about the health of U.S. credit markets, particularly amid rising default rates on commercial and consumer loans. Analysts warned that small and mid-sized banks may face mounting pressure as loan losses increase and regulatory scrutiny intensifies.
These fears prompted a flight from risk assets, echoing earlier stress seen in the crypto and tech sectors. Bitcoin briefly fell below $105,000, marking a sharp weekly drop alongside broader weakness in digital assets.
Trade Comments Offer Brief Relief
Trump’s admission that current tariffs on China are “not sustainable” offered a temporary lift to investor sentiment. Markets also reacted positively to reports that the White House may consider easing tariffs on automobile imports, which could help offset some of the trade-related economic drag.
Still, traders say the outlook remains clouded by uncertainty surrounding both U.S.–China trade negotiations and the ongoing government shutdown, which together have weighed on business confidence and investment flows.
“Investors are craving clarity,” said one market analyst. “While Trump’s remarks brought momentary relief, the underlying fragility in banking and credit markets continues to dominate sentiment.”
Flight to Safety Intensifies
As equities wavered, gold prices surged past $4,300 an ounce, extending a weeklong rally driven by risk aversion and global uncertainty. The precious metal is on track for weekly gains of more than 7%, marking one of its strongest performances since the 2008 financial crisis following Lehman Brothers’ collapse.
The combination of trade tensions, banking concerns, and economic slowdown fears has pushed investors toward safe-haven assets — a pattern that may persist unless policymakers deliver clearer signals on fiscal and trade policy in the coming weeks.
