Stocks slumped at the open, with losses approaching half of Monday’s gains, after China retaliated against the Trump administration’s tariff warnings. But bullish earnings reports from banks and financial institutions gave the market a floor, and investors started to look for bargains.
At last check the Standard & Poor’s 500 Index ticked 0.04%, or just under 5 points, into the green after falling as many as 100 points soon after the open. The Dow Industrials added 0.5%, or 231 points. It had been off as much as 1.3%.
Tech stocks were still struggling. The Nasdaq Composite was off 66 points, or 0.3%. But the index had been down as many as 481 points before bargain hunters jumped in.
The selling was prompted by China’s announcement late Monday (New York time) that it wouldn’t be bullied.
Last week, President Trump threatened a sharp increase in tariffs on Chinese imports in a bid to get a trade deal successfully negotiated.
China’s first response Tuesday was to ban Chinese companies from doing business with U.S. subsidiaries of a South Korean shipbuilding giant. The reason: In China’s view, the companies supported the U.S. government and hurt Chinese firms’ interests.
Treasury Secretary Scott Bessent told the Financial Times that China was in the midst of a recession and “they want to pull everybody else down with them.”
The market pullback came despite solid earnings from some of the nation’s biggest financial institutions, including JP Morgan Chase, Goldman Sachs and Wells Fargo.
JPMorgan said its profit increased by 12%, driven by a 25% rise in revenue from trading and its markets businesses and a 16% jump in investment banking fees.
Consumer spending remained strong, with debit and credit card spending up 9%, contributing to increased revenue for the bank.
Goldman Sachs said its profit was boosted by big gains in its investment banking business. Mergers and initial public offering volumes climbed overall as stocks recovered from the April tariff-related slump.
Shares of both companies, both Dow components moved lower.
JPMorgan was down about 1.9% to $302.01. Goldman Sachs was off 1.9% to $772.06.
Perhaps one reason for JP Morgan’s slide: It took a $170 million charge related to the collapse of auto lending company Tricolor in September. The company was hit by allegations of fraud and accounting issues.
“It’s not our finest moment,” CEO Jamie Dimon conceded in a call with reporters. “I probably shouldn’t say this, but when you see one cockroach, there are probably more,” he added.
Other problems have arisen that might affect banks, including the collapse of auto-parts company First Brands.
Financial shares, however, were generally higher, led by Wells Fargo, Synchrony Financial and American Express.
General Motors shares ticked lower at the open as the automaker reported a $1.6 billion writedown to reflect reduction of its electric-vehicle-manufacturing capacity. GM cited reduced demand after tax credits for EVs ended under the Trump administration. But the stock came back and was up 2.3% at $56.88.
Bitcoin was off more than $3,500 to $112,375 ahead of a speech by Fed Chairman Jerome Powell on the economic outlook. Bitcoin is off more than 9% from its 52-week high of $126,273, reached on Oct. 6. Other cryptocurrencies were lower.
Crude oil was down $1.1 or 1.7% to $58.47 per 42-gallon barrel, after reports that the Organization of Petroleum Exporting Countries is pouring lots of oil onto global markets. The price is the lowest since May.
Interest rates were largely unchanged.
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This story was originally reported by TheStreet on Oct 14, 2025, where it first appeared in the Investing News & Strategies section. Add TheStreet as a Preferred Source by clicking here.