Wells Fargo leads Wall St higher as big banks make bank

Lender Wells Fargo led stocks on Wall Street higher as it joined JPMorgan Chase, Goldman Sachs, Citigroup and asset manager Blackrock in reporting strong quarterly earnings, even if some of those results disappointed elevated expectations.

The trading session was volatile with sentiment waxing and waning as China defended its restrictions on rare earth minerals and slapped a sanction on South Korea’s Hanwha Ocean shipbuilder and US Treasury secretary Scott Bessent accused the Asian nation of wanting to pull everyone down into its recession.

Still, Federal Reserve chair Jerome Powell’s soothing words that the central bank is close to finishing its quantitative tightening kept expectations for further rate cuts alive.

And in the antipodes, central bankers are speaking at the Citi Australia and New Zealand investment conference in Sydney, with Reserve Bank of Australia assistant governor Sarah Hunter and RBNZ chief economist Paul Conway on the agenda.

Making bank

Wells Fargo jumped 8.6% in late trading after the bank beat earnings expectations and raised a profitability target, making it the pick of the major lenders reporting on the day, while Citigroup advanced 4.7% as its earnings were bolstered by a surge in dealmaking and trading revenue. JPMorgan Chase and Goldman Sachs both declined despite their strong earnings, amid heighted expectations among investors.

Investment giant Blackrock gained 3.6% as its assets under management swelled 17% to US$13.46 trillion, while private equity house KKR & Co was up 5.3%.

Stocks on Wall Street were broadly stronger, with the S&P 500 up 0.3% in late trading, with the Dow Jones Industrial Average gaining 0.8%. The tech-heavy Nasdaq Composite dipped 0.1%, with the likes of Nvidia, Amazon, Apple, Meta Platforms and Tesla on the red side of the ledger.

“The US earnings season kicked off in earnest with five major banks all reporting stronger than expected profit and revenue forecasts, fuelled by surging dealmaking and trading,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “US-China trade tensions have pervaded the headlines and been a focus for the market.”

Tensions between the US and China re-emerged after Beijing defended its restrictions of rare earth mineral exports, and added five Hanwha Ocean units to its sanctions list claiming the South Korean shipbuilder was involved in the US probe into Chinese shipping, while US Treasury secretary Scott Bessent said China was trying to pull everyone down into its recession.

A bit of calm

Still, presidents Donald Trump and Xi Jinping are still scheduled to meet, allaying some of those concerns, and comments from US Federal Reserve chair Jerome Powell reaffirmed expectations for lower US interest rates after he said the central bank’s close to finishing a three-year campaign selling Treasuries to shrink its balance sheet.

Across the Atlantic, stock markets were mixed with the UK’s FTSE 100 up 0.1%, while Germany’s DAX 30 declined 0.6% and France’s CAC 40 fell 0.2%.

French luxury goods giant LVMH declined despite lifting third-quarter sales on strong Chinese demand, while Germany’s Thyssenkrupp declined as it prepares to spin out its naval defence business next week.

Swedish telecoms equipment maker Ericsson surged 18% after beating earnings expectations and playing down the impact of US tariffs.

Australian futures are pointing to a 0.3% gain for the S&P/ASX 200 index when trading opens across the Tasman and the kiwi dollar traded at 57.19 US cents at 7am in Auckland from 57.32 cents yesterday.

Central bankers are among the day’s speakers at the Citi Australia and New Zealand investment conference in Sydney, with Reserve Bank of Australia assistant governor Sarah Hunter and RBNZ chief economist Paul Conway scheduled to speak.

PGG Wrightson resumes trading today after its shares were halted yesterday when chair Garry Moore and his deputy Sarah Brown were unexpectedly dumped from the board at its annual meeting.

There’s no major local data scheduled for today.

Reporting by Paul McBeth. Image from joão vincient lewis on Unsplash.

This story has been updated to remove a reference to Uvre's listing on the NZX, which is scheduled for Thursday, not today.