US markets rebounded Friday (US time) from a midweek scare, including a jarring two-day loss of nearly 1,400 points for the Dow Jones industrial average.

Friday's turnaround was led by solid third-quarter earnings from the nation's biggest banks.

It was a free-wheeling sell-off, marked by concerns about rising interest rates, tensions over the trade war with China and a startling plunge in the tech sector.

But by Friday, stocks were on an upswing after JPMorgan Chase, Wells Fargo and Citigroup all reported quarterly profits. Their good news seemed to steady investor nerves.

The Dow Jones industrial average finished Friday with a gain of 287 points, or 1.2 per cent, to 25,339. The blue-chip index still ended the week with a stinging loss, down 4.2 per cent.

The Standard & Poor's 500-stock index was up 1.4 per cent on Friday. The tech-heavy Nasdaq notched a 2.3 per cent gain.

The 10-year Treasury yield climbed for the first time in three days, to 3.158 per cent. Gold dropped slightly to $1,218.05 an ounce.

Despite the week's contagious panic, overseas markets also bounced back Friday. The Stoxx Europe 600 was up 0.3 per cent. Japan's Nikkei Stock Average gained 0.5 per cent, and Hong Kong's Hang Seng increased 2.1 per cent.

Similarly, consumer technology companies recovered, with shares of Netflix up nearly 6 per cent and Amazon up 4 per cent after suffering tough losses earlier in the week.

Lisa Shalett, head of wealth management investment resources at Morgan Stanley, said there was no cause for alarm, and that the week's losses were within the realm of the ordinary. But she urged investors to trust their instincts.

"This is one of those sell-offs that doesn't feel scary because, so far, it's playing to the textbook," Shalett said.

"The market is very rationally re-pricing risk. But we are concerned about the future look for earnings so we are positioning out portfolios in a very conservative way."

After the Dow dropped 832 points Wednesday, one of the worst sell-offs since February, President Donald Trump strongly criticized the Fed for the pace at which it's been raising rates, again signaling that he wanted interest rates to remain low.

"The Fed is making a mistake. They're so tight. I think the Fed has gone crazy," he told reporters while traveling in Pennsylvania on Wednesday.

"It's a correction that we've been waiting for, for a long time. But I really disagree with what the Fed is doing, okay?"

Concerns about interest rates had rattled bank stocks, with the KBW Bank Index sinking 5.8 per cent from last week. But bank shares led the market as trading opened Friday morning, thanks to better-than-expected third-quarter results at the beginning of earnings season.

JPMorgan Chase reported a 24 per cent jump in profit, to US$8.38 billion, mostly thanks to strong consumer business. Citigroup and Wells Fargo both eked out more favorable profits than analysts had predicted.

The markets have been on a historic climb - with the Dow and S&P each hitting dozens of new highs since 2016 - buoyed by a strong US economy and solid corporate earnings, which investors are hoping will lead to a strong retail performance in the upcoming holiday season, despite this week's stumble, said Ivan Feinseth, an analyst with Tigress Financial.

"The strong snapback shows to me that the bulls are still in charge and the market does want to go higher," Feinseth said.

Early Thursday, National Economic Council Director Larry Kudlow in a news conference heralded the administration's economic policies and assured the public that "the war on business is over."

"We are the hottest economy in the world right now," Kudlow said. "With all due respect, I don't think this is anything resembling a sugar high."

Treasury Secretary Steven Mnuchin met with Chinese central bank governor Yi Gang at a World Bank conference in Indonesia on Thursday, a day after he warned China against "competitive devaluation" of its currency against the US dollar as the trade war escalates.

The renminbi had fallen "significantly" during the year, and the Treasury Department is monitoring this "very carefully" to make sure China is not manipulating its currency to gain an advantage in the trade war, Mnuchin told the Financial Times.

He said he wanted to discuss the currency with Beijing as part of the trade talks. "As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations," he told the business newspaper.

Some found reason for optimism after it was announced that President Trump would meet with Chinese leader Xi Jinping at next month's Group of 20 summit in Buenos Aires to discuss the intensifying trade conflict.

"Any kind of softening of the tensions with China would be a huge catalyst for the market," Feinseth said.