Dow Jones Industrial Average recovers footing, brushes off regional bank weakness

• The Dow Jones clawed back around 260 points on Friday.
• Investors are shrugging off a recent downturn in regional banking and lending stocks.
• President Trump floated a softball hint that China tariffs might get walked back eventually.

The Dow Jones Industrial Average (DJIA) found a near-term foothold to wrap up the trading week, rebounding around 260 points from recent lows and fighting to stay on the high side of key moving averages. Equities took a hit this week after multiple entities in the lending and banking sectors went bankrupt or flashed warnings about debt quality, sparking a brief period of wobbly sentiment. Investors recovered their footing to end the week.

Friday rebound takes Dow back from the brink

Friday's equity market recovery was partly driven by hope of an easing in trade tensions after US President Donald Trump soft-balled the idea that his administration could eventually explore reducing tariffs on China. The Trump administration continues to appear more apprehensive about following through on its own threats to ramp up retaliatory tariffs on China, and investors are continuing to bank on a protracted cooling period in sweeping tariffs threatened or imposed by the Trump administration throughout 2025.

After a brief spat of angry social media posts and pulling out of planned sideline talks with China's President Xi Jinping, President Trump has dragged himself back to the negotiating table. Fresh trade talks between Donald Trump and Xi Jinping are now expected in the coming weeks, along with meetings between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng.

The US government shutdown continues to roll onward with little sign of a quick resolution. Official datasets remain suspended or delayed, but this can only be good news for markets that remain hinged largely on impending interest rate cuts from the Federal Reserve (Fed). With official data running dark amid a federal funding freeze, Fed officials will have very limited access to data that could knock the US central bank off its path toward two quarter-point interest rate cuts before the end of the year.

Dow Jones daily chart