[New York Stock Exchange] Mixed Close Amid U.S.-China Trade Tensions and Banks' Earnings Surprises... S&P Up 0.4%

Market Swings Intensify Amid High Volatility
Caution Prevails on U.S.-China Trade Tensions and Shutdown Fears
U.S. Treasury Secretary: "Joint Response with Allies to China’s Rare Earth Controls"
Strong Bank Earnings Fuel Optimism for Corpor

The three major indices of the New York Stock Exchange closed mixed on October 15 (local time). Amid ongoing concerns over escalating US-China trade tensions and the prolonged US federal government shutdown, the stock market fluctuated throughout the session. However, 'earnings surprises' from financial institutions that exceeded market expectations fueled optimism for the earnings season, leading the S&P 500 and Nasdaq indices to rise.

On this day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 46,253.31, down 17.15 points (0.04%) from the previous trading day. The S&P 500, which focuses on large-cap stocks, rose by 26.75 points (0.4%) to 6,671.06, while the tech-heavy Nasdaq climbed 148.379 points (0.66%) to finish at 22,670.08.

Volatility increased as US-China trade conflicts reignited and concerns over the prolonged federal government shutdown persisted. The S&P 500 rose as much as 1.2% during intraday trading before turning negative in the afternoon, but later managed to rebound. As the market showed erratic movements, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), often called the 'Wall Street Fear Index,' surged to 22 at one point before closing lower at 20.7.

Jose Torres, chief economist at Interactive Brokers, analyzed, "Investors do not seem ready to send stocks to all-time highs at this point, as they await further earnings announcements and commentary from Washington and Beijing," adding, "Volatility remains high. Investors are closely watching major news that could impact sentiment and risk-taking behavior, suggesting the market could move sharply in either direction."

Following JP Morgan, Goldman Sachs, and Wells Fargo the previous day, Bank of America and Morgan Stanley also reported better-than-expected earnings, supporting investor sentiment.

Sam Stovall, chief investment strategist at CFRA Research, said in an interview with CNBC, "Banks have delivered sales and profits that surpassed expectations as if hitting a home run," adding, "This signals that the US economy remains robust and, combined with the possibility of another Federal Reserve rate cut at the end of the month, supports investor optimism."

Concerns over US-China trade tensions, a recent source of market instability, continue to linger.

The Donald Trump administration announced a plan for a joint response with allied countries against China's export controls on rare earths. US Treasury Secretary Scott Besant said at CNBC's 'Invest in America Forum' in Washington, D.C., "Chinese officials cannot manage global supply chains and manufacturing processes," adding, "We will respond with an overwhelmingly collective action." This strong statement followed President Trump's harsh criticism the previous day of China's suspension of US soybean imports and his mention of possible suspension of related businesses involving cooking oil and other trade items.

Secretary Besant further emphasized, "We will not negotiate with China just because the stock market is falling," adding, "We will negotiate in a way that is most beneficial to the US economy." However, he left the door open for dialogue, stating that the planned US-China summit at the Asia-Pacific Economic Cooperation (APEC) leaders' meeting in Gyeongju, South Korea, later this month would proceed as scheduled.

In addition, uncertainty is being heightened by the lack of economic data due to the prolonged federal government shutdown.

US Treasury yields remained steady. The yield on the benchmark 10-year US Treasury note stood at 4.03%, unchanged from the previous day, while the yield on the 2-year Treasury note, which is sensitive to monetary policy, rose by 2 basis points (1bp=0.01 percentage point) to around 3.5%.

By stock, Bank of America jumped 4.37% on strong earnings. Morgan Stanley also gained 4.72%. JP Morgan, which reported earnings the previous day, rose 1.2%. AMD soared 9.4% after Oracle announced it would deploy 50,000 of AMD's advanced artificial intelligence (AI) chips in its cloud. Oracle climbed 1.55%. Nvidia fell 0.1%.