CNBC Business News Update - Market Close: Stocks Lower, Investors Worry About Bad Regional Bank Loans, S&P Global Says Consumers Pay Most Tariff Costs 10/16/25

Episode Date: October 16, 2025

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I'm Jessica Eddinger, CNBC. Wall Street opens Friday morning after a volatile Thursday for stocks. Markets popped early, major averages all fell after investors started really worrying about bad loans by some of the regional banks. The Dow down 301 points, a half percent. Verizon shares let it lower. The S&P 500 indexed down 42 points, a half percent. The NASDAQ down 107 points. That was a half. percent as well. Shares of NVIDIA were in the green on Thursday up a little more than 1%. Regional banks shares

tanked Thursday as concerns grow on Wall Street about sour loans and cracks in the credit markets. Zions was among the hardest hit banks after it revealed a bad loan in a filing. Western Alliance Bank claiming one of its borrowers committed fraud. There's a lot of competition to make

these loans because everyone's raised money and they got to put the money to work or else they have to return it. And nobody wants to return money. So what do you do? Ease the covenants up a little bit. Extending loans. We know this has been going on. And it's an isolated incident until there were 10 of them. Probably more will be revealed. And the best case scenario is we do flush out some of the more loosey-goosey stuff and we clean it up and the economy doesn't fall apart. It gives us time. And we don't have to have a crisis. That's the best case scenario. We know what the worst case scenario is because we've seen it.

That's Ritt Holtz Welts, Josh Brown, on CNBC. President Trump now says, yes, the U.S. is in a trade war with China. And China now accuses the U.S. of deliberately causing panic over rare earth mineral controls, but it says it's open to talks. Meantime, S&P Global has analyzed tariff data and finds that President Trump's tariffs will cost global businesses upward of $1.2 trillion this year, with most of that cost being passed on to consumers. Only about a third will be eaten by businesses, two-thirds being passed on to shoppers.

So far, though, shoppers are still spending at least consumers in higher income levels. G-squared's Victoria Green believes that investors have to count on that. The spend is there. The consumer is holding up, especially the high-end consumer. You know, look at Louis Vuitton retorted great results, looking for A-Max to crush it. Those high-end consumers are spending, and people are continuing to spend on goods and services. United came out. People want to upgrade. They want the premium seats.

It's everyone who wants the nice lifestyle. Everybody's willing to pay for that. Nobody wants to sit in the economy anymore. Are there concerns that the consumer is going to break if we layer on weaker labor, higher inflation? Yeah, that's a concern. But right now, betting against the U.S. consumer has been a really bad bet. Mortgage rates have ticked to their lowest in four weeks. According to Mortgage News Daily on Thursday, only 15-100s of percent away from the September 16th lows.

That was the day rates hit their lowest in three years. The average rate on a 30-year fixed home loan. on Thursday, 6.2%. $4,266 an ounce. So on the surface, the economy is great. The Fed is easing. The stock market is booming, but gold is at record level. You think that gold at record levels is more concerning than not?

Yes. Below the surface, there's a lot of question marks that suggest that we've got to be careful in the months ahead. Allianz, chief economist Mohamed Al-Larion on CNBC. On Friday's watch list, earnings are coming from American Express, plus a load of regional banks. Comerica, fifth, third, Huntington Bank shares, regions, State Street, and Truest. New in theaters Friday, Lionsgate's Good Fortune, Amazon's after the Hunt and Universal's Black Phone 2. Universal is a sister company to CNBC. Jessica Eddinger, CNBC.

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