Oct 17 (Reuters) - Wall Street's main indexes were poised for a mixed open on Friday after U.S. President Donald Trump said his meeting with Chinese counterpart was still on, while worries over credit risks at regional banks kept investors on edge.
Futures had tumbled earlier on Friday, following a rout in bank stocks in the previous session when the SPDR S&P regional banking ETF (KRE.P), registered its steepest one-day drop in more than six months in the previous session.
The decline was triggered by Zions Bancorporation (ZION.O), disclosing a $50 million loss tied to two commercial and industrial loans, while Western Alliance (WAL.N), said it had initiated a lawsuit alleging fraud by Cantor Group V, LLC.
The selloff rekindled concerns over lax lending standards in a sector already grappling with two auto bankruptcies, more than two years after the collapse of Silicon Valley Bank.
However, the SPDR S&P regional banking ETF rose 1.9% premarket after positive quarterly results from some regional banks.
"Possibly because they were oversold yesterday and because we're now getting positive earnings from these regional banks that confirm the kind of earnings growth that we saw with the larger global banks earlier in the week. I think that is helping to buoy investor optimism," said Sam Stovall, chief investment strategist at CFRA.
Truist Financial (TFC.N), and Regions Financial (RF.N), added 2.5% and 2.1%, respectively after reporting a higher profit. Fifth Third Bancorp (FITB.O), gained 2.6%.
Zions shares rose 4.4%, while Western Alliance gained 3.8% before the bell.
On the trade war front, Trump said his proposed 100% tariff on goods from China would not be sustainable and that he would meet President Xi Jinping in two weeks.
"Most people realize that Trump has to soften his tone if he wants to get any sort of a compromise out of China ... (it is) encouraging that the president is sounding a bit more dovish in his stance toward China," said CFRA's Stovall.
At 08:39 a.m. ET, Dow E-minis were up 82 points, or 0.18%, S&P 500 E-minis were up 1.25 points, or 0.02%, and Nasdaq 100 E-minis were down 42.25 points, or 0.17%.
Optimism around AI and expectations of U.S. interest rate cuts have propelled Wall Street to record highs this year. However, AI-related tech stocks, which were among the biggest contributors to the rally, also slipped on Friday.
Among other stocks, Eli Lilly (LLY.N), fell 3.8% after Trump said he would bring down prices of weight-loss drugs.
Robust earnings from big U.S. banks this week have set an upbeat tone for the start of the third-quarter reporting season. But with equity valuations already elevated, investors are treading cautiously.
Reporting by Sukriti Gupta, Medha Singh and Twesha Dikshit in Bengaluru; Editing by Shilpi Majumdar
