Stocks Reduce Losses While Trump Eases Trade Concerns- Europe Market Wrap

Stocks trimmed losses after Trump sought to allay fears of a trade war with China, improving sentiment after lenders’ shares fell sharply.

The S&P 500 futures plunged as much as 1.5% before trimming their losses to 0.4%. Earlier in the session, Bank of America, Citigroup, Morgan Stanley, and Wells Fargo all fell in premarket trading after a regional bank ETF plunged nearly 6% on Thursday. Deutsche Bank and Barclays fell more than 6% as European bankers led regional falls.

Trump told reporters that the present tariffs on China were “not sustainable” and that he would meet with Xi Jinping in South Korea in a few weeks.

Meanwhile, Wall Street’s fear barometer, the Cboe Volatility Index, or VIX, reached its highest level since Trump’s tariff proposals roiled markets in April. The failures of Tricolour Holdings and First Brands Group had traders on edge, and the mainly favourable earnings from three regional banks on Friday did little to boost mood.

Among the largest decliners in European bank bonds on Friday were JPMorgan’s Euro-denominated notes due January 2036, which fell by 0.5%, the most since early September, and Barclays’ bonds due 2035, which fell the most in almost three weeks.