Major US Banks Post Strong Quarter, Calming Trade Jitters

Washington is weighing its options as China leverages its stronghold in the rare earth minerals market to aggressively undercut global prices, creating an uneven playing field, according to U.S. Treasury Secretary Scott Bessent. In an exclusive interview Wednesday, Bessent told CNBC that the administration views China’s economic model as fundamentally “nonmarket.” This comes amid growing concerns over Beijing’s influence on critical supply chains.

The Trump administration is considering a proactive approach, potentially “exercising industrial policy” to institute price floors across strategic sectors. The measure, a form of government price control, seeks to establish a lower limit on what suppliers can charge for goods and services, often set above prevailing market rates. This move is designed to protect domestic industries from what the U.S. views as unfair price manipulation.

The potential impact of such a policy is significant. By artificially inflating the price of rare earth minerals, the U.S. government risks harming downstream industries that rely on these materials for manufacturing everything from smartphones to electric vehicles. However, proponents argue that the long-term strategic benefits of securing a stable domestic supply chain outweigh the short-term cost increases.

Meanwhile, the financial sector continues to demonstrate resilience despite ongoing trade tensions. Bank of America and Morgan Stanley both posted stellar second-quarter earnings, exceeding analyst expectations. This robust performance mirrors similar successes seen at JPMorgan Chase and Goldman Sachs, driven by a surge in dealmaking activity and buoyant stock market conditions.

Despite President Trump’s ongoing trade rhetoric aimed at China, investor sentiment remains surprisingly optimistic. Stateside trading saw the S&P 500 and Nasdaq Composite both climb, while the Russell 2000 notched a new record high. The underlying strength of the U.S. economy, as evidenced by strong earnings reports, appears to be offsetting concerns about the potential negative impacts of tariffs. The Federal Reserve’s Beige Book also highlights that many firms are already absorbing increased costs stemming from existing tariffs.

Looking ahead, the market’s trajectory will hinge on the upcoming earnings releases from major technology players like Tesla and Intel next week. These reports will provide a crucial gauge of the tech sector’s ability to navigate the complex geopolitical landscape and maintain growth in the face of escalating trade friction with China. A strong performance would likely bolster investor confidence, while disappointing results could trigger a market correction.