The S&P 500 ended higher on Wednesday as strong quarterly results from Morgan Stanley and Bank of America lifted investor sentiment, even as concerns about rising U.S.-China trade tensions lingered.
Morgan Stanley’s shares jumped 4.7% to a record high after the firm exceeded Wall Street expectations for third-quarter profit, driven by a surge in dealmaking. Bank of America also climbed 4.4% after reporting strong results, helping the S&P 500 banking index rise 1.2%—its first three-day winning streak in over three weeks.
The upbeat performance by major lenders came just a day after Goldman Sachs and JPMorgan Chase posted solid earnings and predicted continued strength in investment banking. The positive results from financial giants suggest the U.S. economy remains resilient despite global uncertainties and a temporary pause in some government data releases due to a federal shutdown.
“People are spending, and the consumer seems to be fine. That’s been one of the messages from the bank earnings,” said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. “Employment is not falling like a stone. Both inflation and employment are within ranges that are basically reasonable.”
Technology stocks also contributed to the market’s gains. The Philadelphia Semiconductor Index jumped 3% after Dutch chipmaker ASML reported stronger-than-expected third-quarter orders and operating income, citing demand fueled by artificial intelligence investment. ASML’s U.S.-listed shares gained 2.7%.
At the close, the S&P 500 climbed 0.40% to finish at 6,671.06 points. The Nasdaq advanced 0.66% to 22,670.08 points, while the Dow Jones Industrial Average slipped slightly by 0.04% to 46,253.31 points. Seven of the 11 major S&P sectors ended the session higher, led by real estate, which rose 1.5%, and utilities, which added 1.29%.
Trading volume was relatively strong, with 21.5 billion shares changing hands across U.S. exchanges—higher than the 20.4 billion average of the past 20 sessions.
Meanwhile, geopolitical and policy developments also weighed on market sentiment. U.S. Treasury Secretary Scott Bessent said in an interview with CNBC that Washington did not want to escalate trade tensions with Beijing, emphasizing that President Donald Trump is prepared to meet Chinese President Xi Jinping in South Korea later this month.
Earlier in the week, Trump said Washington was considering cutting some trade ties with China, including restrictions related to cooking oil imports, as the two countries imposed new port fees in a tit-for-tat move.
Bessent also revealed plans to present three or four candidates for Federal Reserve chair to Trump for interviews after the Thanksgiving holiday. In a separate appearance, Fed Governor Stephen Miran said, “two more cuts this year sounds realistic,” citing signs of a weakening labor market. Fed Chair Jerome Powell on Tuesday similarly left open the possibility of additional rate reductions.
The Federal Reserve’s latest Beige Book, compiled through October 6, reported that employers across several sectors are exercising hiring caution due to economic uncertainty and increased AI-related investments. The report also noted that labor supply remains tight in industries such as agriculture, hospitality, manufacturing, and construction, partly because of the Trump administration’s tougher stance on illegal immigration.
Among individual movers, Abbott fell 2.4% after posting lower-than-expected quarterly revenue, while Progressive Corp dropped 5.8% following its earnings release. In contrast, Bunge surged nearly 13%, even after lowering its 2025 earnings outlook in the wake of its merger with Viterra.
Market breadth was evenly split, with the number of advancing and declining stocks within the S&P 500 nearly equal. The index recorded 34 new highs and 5 new lows, while the Nasdaq posted 154 new highs and 46 new lows.
Wall Street’s positive finish reflects optimism about corporate strength and consumer resilience, tempered by caution over global trade and monetary policy decisions that could shape the economic outlook in the months ahead.
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