TSX lower amid U.S. regional banking jitters

Investing.com -- Canada’s main stock exchange was lower on Friday, as investor concerns over the credit health of regional U.S. lenders extended into a second day.

Jitters over smaller American banks have grown in recent days, with traders particularly flagging worries around weakness in the credit health of these companies following the high-profile collapses of U.S. auto parts supplier First Brands and car dealership TriColor earlier this year.

The S&P/TSX composite index was down 351 points or 1.16% at 30,108.48. 

On Thursday index closed lower by 0.6% at 30,458.80, retreating from an all-time peak notched in the prior session. An ongoing rally in gold prices helped to fuel metal mining stocks, but these increases were offset by declines in financial and energy shares.

U.S. stocks mixed

U.S. stocks gained on Friday, shrugging off worries over the health of the country’s regional lenders added to concerns over U.S.-China tensions and the ongoing government shutdown.

The Dow Jones Industrial Average traded 238 points, or 0.52%, higher, while the S&P 500 index gained 33 points, or 0.5%, and the NASDAQ Composite gained 117 points, or 0.52%.

The main averages on Wall Street slumped on Thursday, after Zions Bancorporation and Western Alliance Bancorporation disclosed loan losses tied to potential fraud, reviving fears of weak credit oversight across smaller lenders.

The Dow Jones Industrial Average lost over 300 points, or 0.7%, while the S&P 500 and the NASDAQ Composite settled down 0.6% and 0.5%, respectively.

Broader market sentiment was also pressured by geopolitical and political headwinds.

Investors remained wary of worsening U.S.–China trade tensions, as Trump has announced plans to impose an additional 100% tariff on all imports from China starting next month in response to Beijing’s restrictions on rare earth shipments.

Meanwhile, the U.S. government shutdown, now in its third week, continued to weigh on confidence, disrupting economic data releases and raising concerns about near-term growth.

Banking results in focus

Friday will offer another chance to gauge how regional banks are faring, with a slew of these companies set to report their earnings, including State Street and Comerica.

Fifth Third Bancorp has posted third-quarter earnings that topped estimates, as the regional bank was bolstered by a drop in deposit costs which drove interest income higher. Ohio-based Fifth Third and many of its peers have been pushing to ratchet down deposit costs across their portfolios in the wake of a renewed Federal Reserve interest rate cutting cycle.

Meanwhile, credit card giant American Express lifted the lower end of its 2025 profit and revenue outlook, buoyed by its affluent customer base overlooking broader economic and political uncertainties.

Away from the banking sector, Oracle Corporation provided the latest glimpse into the state of the artificial intelligence euphoria, unveiling a soaring long-term financial outlook that the software group said was being powered by sky-high demand that is "really hard to comprehend."

Railroad operator CSX Corporation reported a steep slide in third-quarter profit compared to a year ago, but, when discounting one-time impairment charges of $164 million, income would have stood at $818 million, just above Wall Street forecasts.

Micron Technology plans to stop supplying server chips to data centers in China after the business was slapped with a government ban in 2023, Reuters reported on Friday, citing two people briefed on the decision.

Oil lower

Oil prices slipped lower Friday after U.S. President Donald Trump and Russian President Vladimir Putin agreed to meet and discuss ending the Ukraine war.

Brent futures dropped 0.4% to $60.83 a barrel, and U.S. West Texas Intermediate crude futures fell 0.3% to $57.31 a barrel.

Both contracts were down around 3% on a weekly basis, falling to their weakest level since early May after Trump and Putin agreed to another summit on the war in Ukraine, with the meeting expected to be held within the next two weeks in Budapest.

Gold touches new all-time highs

Gold prices steadied, but did not stray far from fresh record highs, as growing expectations of a Federal Reserve rate cut this month and renewed U.S.-China trade tensions drove investors toward safe-haven assets.

Spot gold were marginally higher by 0.1% to $4,329.85 per ounce, after briefly touching a new peak of $4,379.29 earlier in the session. U.S. gold futures for December jumped 0.9% to $4,344.71.

The yellow metal has now on track to deliver its ninth consecutive weekly gain, and has extended its record-breaking rally to a fifth straight session.