US stocks finished higher despite a sell-off in regional banking stocks. Weekly market recap, trading week 42/2025

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🔥🔥 GLOBAL MARKETS INVESTOR PORTFOLIO — UP 60% SINCE JANUARY 2024 DURING THE MARCH-APRIL 2025 MARKET TURMOIL, MAJOR US INDEXES FELL NEARLY 20%, WHILE THE GMI PORTFOLIO GAINED OVER 5%, FIND OUT HOW BELOW:

In this series, you can find financial markets posts with the highest number of interactions from my X platform feed over the most recent week. I am aware that not everybody uses X regularly, so I thought it could provide some value to your analysis, and investment process. These posts are surrounded by extra charts, commentary and explanations of complicated topics.

US stocks finished higher this week despite declines on Wednesday and Thursday, driven by tariff headlines and weakness in regional banks.

Zions Bancorporation and Western Alliance each fell more than -10%, dragging the regional banking ETF ,$KRE, down ~6%. It was the 2nd worst day since the Regional Banking Crisis in March 2023.

This followed Zions revealing losses tied to bad loans, while Western Alliance said a borrower committed fraud, sparking broad selling.

Jefferies shares also slid over -11% due to exposure to bankrupt auto parts maker First Brands, which is now under federal investigation.

Jefferies has now lost -23% in October, putting it on track for its worst month since the March 2020 Crash.

To put this differently, the wave of bad loans in the auto and private credit sectors has reignited fears of broader banking stress.

Additionally, on Wednesday, short-term borrowing costs between banks (overnight rates) spiked, showing rising funding pressure, lack of market liquidity.

Banks also tapped the Fed’s emergency lending tool, the Standing Repo Facility, marking its first meaningful use since 2020.

Market sentiment stabilized on Friday as liquidity concerns eased, no new troubles emerged from regional banks or private credit, and US-China officials softened their tone on trade talks.

Meanwhile, gold and silver sold off sharply on Friday but ended the week materially higher, while crypto markets came under pressure again.

In case you missed it, other posts from this week are listed below.

1) Weekly performance. In the first post attached, you can see last week’s performance of the major US indexes, the VIX volatility index, 10-year Treasury yield, the US Dollar, gold, silver, WTI Crude oil and Bitcoin.

- S&P 500 +1.7%
- Nasdaq +2.1%
- Dow Jones +1.6%
- Russell 2000 (small caps) +2.4%
- US 10-year Treasury yield -4 bps
- VIX -2%, front month VIX futures -1%
- US Dollar index -0.6%
- Silver +6.9%
- Gold +6.2%
- WTI Crude Oil -2.1%

- Bitcoin -3.9%

For the trading week ending October 24, key events are:

- US Existing Home Sales for September on Thursday

- US CPI Inflation for September on Friday

- US Consumer Sentiment for October on Friday

- US S&P Global Services and Manufacturing PMIs for October on Friday

- ~10% of S&P 500 firms report earnings results

All eyes will be on US CPI inflation data, tariff headlines and news on regional banks and market liquidity.

2) Global equities 'sell signal' was triggered for the 4th consecutive month.

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