The S&P 500 ended higher Wednesday, with Morgan Stanley and Bank of America rallying after solid quarterly results, while investors remained focused on the recent increase in China-U.S. trade tensions.

Morgan Stanley's shares hit a record high, while Bank of America rose after the top lenders beat Wall Street estimates for third-quarter profit on dealmaking strength.

The S&P 500 banking index rose in its first three-day winning streak in more than three weeks. A day earlier, Goldman Sachs and JPMorgan Chase reported solid performance in investment banking and predicted that the business would continue to boom.

This week's bank results indicate strength for major U.S. companies as third-quarter earnings season kicks off, and they also provide hints of the economy's health while many macroeconomic reports remain on hold due to a government shutdown.

"People are spending, and the consumer seems to be fine. That's been one of the messages from the bank earnings," said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. "Employment is not falling like a stone. Both inflation and employment are within ranges that are basically reasonable."

The Philadelphia Semiconductor Index jumped after ASML reported third-quarter orders and operating income above market expectations, lifted by booming AI investment. An investment consortium including BlackRock, Microsoft and Nvidia will buy one of the world's biggest data center operators in a $40 billion deal. Shares of data center firms rose, with Applied Digital surging.

According to preliminary data, the S&P 500 gained 27.19 points, or 0.41%, to end at 6,671.50 points, while the Nasdaq Composite gained 148.43 points, or 0.66%, to 22,670.13.

The Dow Jones Industrial Average fell 2.83 points, or 0.01%, to 46,267.63. U.S. Treasury Secretary Scott Bessent told CNBC that Washington did not want to escalate a trade conflict with China, emphasizing that President Donald Trump is ready to meet Chinese President Xi Jinping in South Korea later this month.

On Tuesday, Trump said Washington was considering cutting some trade ties with China, including in relation to cooking oil. Also on that day, the two countries began imposing tit-for-tat port fees.

Bessent also said he plans to present three or four Federal Reserve chief candidates to Trump for him to interview sometime after the U.S. Thanksgiving holiday. Fed Governor Stephen Miran at a CNBC event said "two more cuts this year sounds realistic," noting that the labor market has clearly weakened.

Fed Chair Jerome Powell also left the door open to rate cuts on Tuesday. The Fed said in its latest Beige Book report compiled through October 6 that some employers reported cutting jobs due to economic uncertainty, and in some cases, due to increased investment in AI.

The report also showed the labor supply in hospitality, agriculture, construction and manufacturing was strained due to the Trump administration's crackdown on illegal immigration. Abbott declined following downbeat quarterly revenue from the medical equipment maker.

Progressive Corp fell after the insurer reported third-quarter results. Bunge jumped despite the grain trader lowering its 2025 earnings forecast following its merger with Viterra.