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Indexes up: Dow 0.52%, S&P 500 0.34%, Nasdaq 0.23%

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Trump says 100% tariffs on China not sustainable

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Eli Lilly ( LLY ) falls after Trump vows weight-loss drug price

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(Updates with mid-morning prices)

By Sukriti Gupta and Twesha Dikshit

Oct 17 (Reuters) - Wall Street's main indexes nudged

higher in volatile trading on Friday as investors assessed U.S.

President Donald Trump's latest remarks on China, while a fresh

round of earnings temporarily eased concerns over credit risks

at regional banks.

Trump said he would meet his Chinese counterpart Xi Jinping

in two weeks in South Korea, adding that his proposed 100%

tariff on goods from China would not be sustainable.

"The market doesn't really know what to take when Donald

Trump speaks," said Robert Pavlik, senior portfolio manager at

Dakota Wealth.

"There's just a lot of back and forth comments with regards

to China and trade tariffs and pretty much everything else. It's

very difficult to have a solid understanding and to get

confidence when the president speaks about anything."

Meanwhile, most regional bank stocks stabilized from a

brutal selloff that had extended from the previous session when

Zions Bancorporation disclosed losses tied to two

commercial and industrial loans and Western Alliance

revealed it had initiated a lawsuit alleging fraud by Cantor

Group V, LLC.

The selloff brought back concerns over lax lending standards

in a sector already grappling with two auto bankruptcies, more

than two years after the collapse of Silicon Valley Bank.

The KBW regional banks index was up 1.2%, rebounding

from Thursday's drop of 6.3%, its biggest since early April.

The broader S&P financial index ticked up 0.8%.

Truist Financial ( TFC ) shares gained 4%, after the bank

reported higher third-quarter profit. Fifth Third Bancorp ( FITB )

rose 1.7%. Zions shares added 3.8%, while Western

Alliance advanced 2.4%.

Robust earnings from big U.S. banks this week have set an

upbeat tone for the start of the third-quarter reporting season.

But with elevated equity valuations, investors are treading

cautiously.

At 12:07 p.m. ET, the Dow Jones Industrial Average

rose 239.04 points, or 0.52%, to 46,191.28. The S&P 500

gained 22.37 points, or 0.34%, to 6,651.44, while the Nasdaq

Composite advanced 51.84 points, or 0.23%, to 22,614.37.

The main U.S. indexes were on track to register weekly

gains, if current levels hold.

The CBOE volatility index, investors' fear gauge,

dropped to 23.3 points, after hitting its highest in nearly six

months at 28.99 earlier in the day.

AI-related tech stocks, which were among the biggest

contributors in propelling equities to record highs this year,

slipped in the day.

The Philadelphia Semiconductor index dropped 0.6%,

with Broadcom ( AVGO ) and Advanced Micro Devices ( AMD ) down

2% and 1%, respectively.

The S&P 500 consumer staples index gained 1.2%.

Eli Lilly ( LLY ) fell 3.1% after Trump said he would bring

down prices of weight-loss drugs.

State Street dropped 3.2% after the bank's

third-quarter net interest income missed estimates.

Declining issues outnumbered advancers by a 1.21-to-1 ratio

on the NYSE and by a 1.59-to-1 ratio on the Nasdaq.

The S&P 500 posted five new 52-week highs and two new lows,

while the Nasdaq Composite recorded 23 new highs and 91 new

lows.