Dow Jones: Sharp Rally Today Reverses 600-Point Slide on Strong Bank Earnings

What Triggered the Turnaround?

Stocks opened sharply lower after China imposed sanctions on five U.S. subsidiaries of South Korea’s Hanwha Ocean, reigniting fears of an economic cold war. Treasury Secretary Scott Bessent called the move a “sign of weakness” — but also a warning that Beijing might try to drag others down. That kind of mixed messaging reflects the market’s hesitation: are we dealing with economic posturing, or systemic risk?

Earnings helped change the tone. Wells Fargo surged 7% and Citigroup climbed 3.4% after solid results, giving investors a reason to step in. The rally wasn’t driven by confidence — it was about price. Strong financials provided a psychological floor, and short-covering or dip-buying algorithms likely helped the momentum.

Who Led the Bounce — and Who Stayed Behind?

Cyclicals were the winners. Caterpillar gained nearly 5%, American Express rose 3.6%, and Honeywell tacked on over 2%. These names suggest the economy still has some engine left, or at least that traders aren’t pricing in a downturn just yet.

But tech told a different story. Nvidia dropped more than 3%, Amazon lost over 1%, and Salesforce slipped 2%.

Higher Treasury yields are playing a role here — the 10-year held near 4.63%, and that’s pressuring growth names. When yields rise, future cash flows get discounted more sharply, which weighs on tech valuations. That’s the connection traders are watching.

Even within the banks, it wasn’t a clean sweep. JPMorgan and Goldman Sachs both beat estimates but slipped on the day — likely a mix of profit-taking and front-loaded expectations. It reinforces the idea that this rally still has skeptics.