Oct 15 (Reuters) - The S&P 500 climbed on Wednesday, with Morgan Stanley and Bank of America rallying after solid quarterly results, while investors remained focused on the recent escalation of China-U.S. trade tensions.
Morgan Stanley's (MS.N), shares hit a record high and were last up 5.8%, while Bank of America (BAC.N), rose 3.9% after the top lenders beat Wall Street estimates for third-quarter profit on dealmaking strength.
The S&P 500 banking index (.SPXBK), rose 1.6% and was set to log its first three-day winning streak in more than three weeks.
A day earlier, Goldman Sachs (GS.N), and JPMorgan Chase (JPM.N), reported solid performance in investment banking and predicted that the business would continue to boom.
This week's bank results indicate strength for major U.S. companies as third-quarter earnings season kicks off, and they also provide hints of the economy's health while many macroeconomic reports remain on hold due to a government 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."
The Philadelphia Semiconductor Index (.SOX), jumped 2.7% after ASML (ASML.AS), reported third-quarter orders and operating income above market expectations, lifted by booming AI investment. U.S.-listed shares of ASML advanced 1.6%.
An investment consortium including BlackRock, Microsoft and Nvidia will buy one
The S&P 500 was up 0.27% at 6,662.25 points.
The Nasdaq gained 0.46% to 22,625.23 points, while the Dow Jones Industrial Average was up 0.05% at 46,293.43 points.
Traders work on the floor of the American Stock Exchange (AMEX) at the NYSE in New York
Futures-options traders work on the floor at the American Stock Exchange (AMEX) at the New York Stock Exchange (NYSE) in New York City, U.S., October 2, 2025. REUTERS/Brendan McDermid Purchase Licensing Rights
Six of the 11 S&P 500 sector indexes declined, dragged lower by industrials (.SPLRCI), down 0.47%, followed by a 0.31% loss in materials (.SPLRCM).
U.S. Treasury Secretary Scott Bessent told CNBC that Washington did not want to escalate a trade conflict with China, emphasizing that President Donald Trump is ready to meet Chinese President Xi Jinping in South Korea later this month.
On Tuesday, Trump said Washington was considering cutting some trade ties with China, including in relation to cooking oil. Also on that day, the two countries began imposing tit-for-tat port fees.
Bessent also said he plans to present three or four Federal Reserve chief candidates to Trump for him to interview sometime after the U.S. Thanksgiving holiday.
Fed Governor Stephen Miran at a CNBC event said "two more cuts this year sounds realistic," noting that the labor market has clearly weakened. Fed Chair Jerome Powell also left the door open to rate cuts on Tuesday.
Abbott (ABT.N), declined 4% following downbeat quarterly revenue from the medical equipment maker.
Progressive Corp (PGR.N), lost 6.7% after the insurer reported third-quarter results.
Bunge (BG.N), jumped 11.6% despite the grain trader lowering its 2025 earnings forecast following its merger with Viterra.
Declining stocks outnumbered rising ones within the S&P 500 (.AD.SPX), by a 1.1-to-one ratio.
The S&P 500 posted 33 new highs and 4 new lows; the Nasdaq recorded 141 new highs and 34 new lows.
Reporting by Sukriti Gupta and Twesha Dikshit in Bengaluru, and by Noel Randewich in San Francisco; Editing by Maju Samuel and Matthew Lewis
