[New York Market Briefing] US stocks rally on Trump remark that he will meet Xi Jinping "within two weeks"

The three major U.S. stock indexes in New York closed higher, after U.S. President Donald Trump repeatedly said he would hold a summit with Chinese President Xi Jinping as scheduled.

On the 17th (U.S. Eastern Time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 46,190.61, up 238.37 points (0.52%) from the previous session. The Standard & Poor's (S&P) 500 Index closed at 6,664.01, up 34.94 points (0.53%), and the Nasdaq Composite Index ended the session at 22,679.97, up 117.44 points (0.52%).

In an interview with Fox Business Network that day, Trump reiterated that relations with China would be fine and that he would meet Xi Jinping within two weeks. He also said that a 100% additional high tariff was an unsustainable figure, adding, "It may be maintained, but they made me do this."

Such remarks helped bolster the recovery in buying sentiment. U.S. stock index futures plunged more than 1% before the open but, as Trump's comments and strong bargain buying poured in, they retraced to around flat by the open. Although concerns that regional banks' troubles could spill over into systemic risk had been raised since the previous day, more voices are saying this time it will not lead to a structural problem like the Silicon Valley Bank (SVB) incident.

Investment firm Baird analyzed that the previous day's share price declines for Zions Bancorp and Western Alliance Bancorp were excessive, given the potential loan-loss exposures implied by the decline in regional banks' market values. The fact that regional bank Fifth Third Bancorp reported results that beat expectations and saw its shares rise 1% helped dispel fears and supported optimism.

Shares of the two regional banks that had reported trouble also rebounded. Zions rose about 5%, and WAB climbed more than 3%. Investment bank Jefferies, which has been hurt by investments in bankrupt auto parts retailer First Brands, also saw its stock rebound about 6% that day.

There was also an impact from Oppenheimer raising its investment rating. International credit rater Moody's likewise dismissed concerns about a broad-triggering 'contagion' that could spark a widespread financial crisis, saying it did not see such a phenomenon on a system-wide basis regarding the regional bank bad-loan situation. Ross Mayfield, an investment strategist at Baird, said, "This afternoon's positive mood is largely related to Trump's remarks about China."

By sector, all sectors rose except materials and utilities. Consumer staples rose 1.23%. Among mega tech companies with market capitalizations above $1 trillion, Tesla and Apple rose around 2%.

By contrast, Oracle plunged 7% after some Wall Street analysts expressed doubts about the company's long-term outlook. Oracle had forecast cloud infrastructure revenue of $166 billion in fiscal 2030 the previous day. That is nearly ten times the $18 billion of that revenue in fiscal 2026.

U.S. brokerage Interactive Brokers Group saw its stock fall more than 3% despite better-than-expected third-quarter results. U.S. credit card company American Express jumped more than 7% on news that its third-quarter results surged.

According to the CME FedWatch Tool, the probability implied by federal funds futures that the October policy rate would be cut by 50 basis points fell to around 1% in one day. It was 3.7% near the prior day's close. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 4.53 points (17.90%) from the previous session to 20.78.

Ahn Hye-won, Hankyung.com Reporter anhw@hankyung.com