December S&P 500 E-Mini futures (ESZ25) are trending down -0.02% this morning, paring earlier losses after U.S. President Donald Trump moved to ease concerns over a trade war with China.
President Trump told reporters on Friday that current tariffs on China were “not sustainable” and confirmed plans to meet with Chinese leader Xi Jinping in South Korea in the coming weeks.
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S&P 500 futures initially dropped as much as 1.5% amid worries about the health of regional U.S. banks. Zions Bancorp and Western Alliance Bancorp said on Thursday that they were victims of suspected fraud involving loans linked to troubled property funds. Analysts said they believe these issues are likely isolated events, but investors remain especially sensitive to signs of stress in the sector following the 2023 collapse of Silicon Valley Bank. This adds to a growing list of investor concerns, including the U.S. government shutdown, fears of an AI bubble, and escalating U.S.-China trade tensions.
In yesterday’s trading session, Wall Street’s major indices closed lower. Zions Bancorp (ZION) sank over -13% after disclosing a $50 million charge-off tied to a loan issued by its wholly owned subsidiary, California Bank & Trust, in San Diego. Also, Western Alliance Bancorp (WAL) plunged more than -10% after the lender said it filed a lawsuit in August against one of its borrowers, alleging fraud. In addition, Hewlett Packard Enterprise (HPE) slumped over -10% after the server and cloud company provided disappointing FY26 guidance. On the bullish side, J.B. Hunt Transport Services (JBHT) soared more than +22% and was the top percentage gainer on the S&P 500 after the logistics company posted better-than-expected Q3 results.
Economic data released on Thursday showed that the U.S. Philly Fed manufacturing index fell to a 6-month low of -12.8 in October, weaker than expectations of 8.6.
Fed Governor Christopher Waller said on Thursday that policymakers can continue lowering interest rates in quarter-point steps to bolster the weakening labor market. “You don’t want to make a mistake, so the way to avoid that is to go cautiously or carefully and do 25, wait and see what happens, and then you can get a better idea of what to do,” Waller said. At the same time, Fed Governor Stephen Miran said he would support a half-percentage-point rate cut this month and reiterated that trade tensions heighten economic uncertainty and amplify downside risks to growth.
