Key Takeaways
- Stock markets showed mixed performance today, with the Dow Jones Industrials reaching a 1.5-week high thanks to positive corporate news from companies like General Motors and Coca-Cola.
- Mining stocks faced pressure from significant drops in gold and silver prices, while weakness in chip manufacturers impacted the Nasdaq 100.
- Market sentiment was influenced by ongoing US-China trade negotiations and the US government shutdown, which delayed economic data releases.
- The Q3 earnings season indicated that a high percentage of S&P 500 companies beat forecasts, though overall profit and sales growth saw a slowdown compared to previous quarters.
- Interest rates saw a slight increase, with T-notes benefiting from government shutdown uncertainty, while European bond yields moved lower.
Market Dynamics and Corporate Drivers
Today’s trading saw the S&P 500 Index (SPX) up by +0.07%, the Dow Jones Industrials Index (DOWI) gain +0.58%, and the Nasdaq 100 Index (IUXX) register a slight dip of -0.12%. December E-mini S&P futures (ESZ25) traded higher by +0.07%, while December E-mini Nasdaq futures (NQZ25) were down -0.11%.
Overall stock indexes presented a mixed performance, with the Dow Jones Industrials marking a 1.5-week high. The broader market experienced modest gains, supported by encouraging corporate announcements.
General Motors (GM) experienced a significant surge, climbing over +14%, after revising its full-year adjusted earnings per share (EPS) estimate upwards. Similarly, RTX Corp (RTX) saw a rise of more than +8% following an increase in its full-year adjusted sales forecast. Coca-Cola (KO) also reported better-than-expected Q3 comparable EPS, contributing to a stock increase of over +3%.
Sector Performance and Market Pressures
Conversely, mining stocks encountered pressure today. Gold prices experienced a drop of more than -4%, and silver prices fell by over -7%, attributed to long liquidation pressures following recent rallies to record highs. The Nasdaq 100 was also impacted by a downturn in semiconductor stocks.
The overall stock market gains were moderated as investors digested the sharp increases from the preceding two trading sessions. A central focus for market participants remained the progress of US-China trade negotiations. President Trump reiterated his threat to impose higher tariffs on Chinese goods if a deal isn’t reached by November 1st. A meeting with Chinese President Xi Jinping is scheduled for next week on the sidelines of the Asia-Pacific Economic Cooperation conference in South Korea.
💡 In minor economic news, the Philadelphia Fed’s non-manufacturing business activity survey for October decreased by -9.9 points, reaching a four-month low of -22.2.
The Impact of the Government Shutdown
The prolonged US government shutdown, now in its fourth week, continues to affect market sentiment and delay the release of crucial economic data. This has led to postponements of key reports, including the latest weekly initial unemployment claims and the September payroll report. The Bureau of Labor Statistics (BLS) has announced that the September consumer price report, originally scheduled for release last Wednesday, will now be published this Friday.
The White House has warned that an extended shutdown could result in widespread furloughs for employees in government programs not prioritized by President Trump. Bloomberg Economics estimates that as many as 640,000 federal workers could be furloughed, potentially leading to an increase in jobless claims and pushing the unemployment rate higher.
The convergence of US-China trade tensions, the persistent government shutdown, and concerns over US credit quality previously fueled a significant surge in precious metals as safe-haven assets, with both gold and silver reaching new all-time highs last Friday.
Q3 Earnings Season and Federal Reserve Outlook
This week’s market attention is largely directed towards earnings results as the third-quarter earnings season progresses. An environment of rising corporate earnings expectations generally provides a positive backdrop for stocks. According to Bloomberg Intelligence, approximately 85% of S&P 500 companies that have released their Q3 results have exceeded analyst forecasts. Furthermore, over 22% of S&P 500 companies providing guidance for their Q3 earnings are expected to surpass analyst expectations, marking the highest figure seen in a year.
However, Q3 profits are projected to have grown by +7.2% year-over-year, representing the slowest increase in two years. Q3 sales growth is also anticipated to decelerate to +5.9% year-over-year, down from 6.4% recorded in the second quarter.
📊 The markets are currently pricing in a 99% probability of a 25 basis point rate cut at the upcoming Federal Open Market Committee (FOMC) meeting scheduled for October 28-29.
Overseas stock markets traded higher today. The Euro Stoxx 50 index reached a new all-time high, trading up by +0.02%. China’s Shanghai Composite closed with a gain of +1.36%, and Japan’s Nikkei Stock 225 also hit a new record high, closing up by +0.27%.
Interest Rate Movements
December 10-year Treasury notes (ZNZ5) saw a rise of +5 ticks, resulting in a decrease of -2.5 basis points in the 10-year T-note yield, which settled at 3.955%. T-note prices experienced a slight increase today, finding support from the ongoing US government shutdown. The shutdown’s potential to affect job losses, reduce consumer spending, and weaken the US economy could provide a rationale for the Federal Reserve to consider further interest rate cuts.
T-notes maintained modest gains following the release of the October Philadelphia Fed non-manufacturing business activity survey, which indicated a decline to a four-month low.
European government bond yields also moved lower today. The yield on the 10-year German Bund decreased by -2.2 basis points to 2.555%, and the 10-year UK gilt yield fell by -2.3 basis points to 4.482%.
Swaps are reflecting a 2% probability of a 25 basis point rate cut by the European Central Bank (ECB) at its next policy meeting on October 30.
Notable US Stock Movers
Top Gainers
- General Motors (GM) led the gainers in the S&P 500, up over +14%, after revising its full-year adjusted EPS estimate upwards to $9.75-$10.50.
- Warner Bros. Discovery (WBD) climbed more than +9%, leading gainers in the Nasdaq 100, following an announcement regarding a review of strategic alternatives to maximize shareholder value.
- Halliburton (HAL) traded more than +9% higher after reporting Q3 revenue of $5.60 billion, surpassing the consensus estimate of $5.39 billion.
- RTX Corp (RTX) surged over +8% after increasing its full-year adjusted sales estimate to $86.5 billion-$87.0 billion.
- Danaher (DHR) gained more than +8% after reporting Q3 adjusted EPS of $1.89, exceeding the consensus expectation of $1.72.
- Crown Holdings (CCK) rose over +4% after boosting its full-year adjusted EPS estimate to $7.70-$7.80.
- 3M Co (MMM) led gainers in the Dow Jones Industrials, up more than +4%, after raising its full-year adjusted EPS from continuing operations forecast to $7.95-$8.05.
- Coca-Cola (KO) saw an increase of over +3% after its Q3 comparable EPS of 82 cents came in higher than the consensus of 78 cents.
Top Losers
- Mining stocks experienced significant downturns. Newmont (NEM) was down over -9%, leading losers in the S&P 500, amidst declines in gold and silver prices. Other mining companies like Barrick Mining (B), Coeur Mining (CDE), Kinross Gold (KGC), Anglogold Ashanti Plc (AU), and Freeport McMoRan (FCX) were all down over -3%.
- Semiconductor stocks declined today, impacting the Nasdaq 100. Marvel Technology (MRVL), Advanced Micro Devices (AMD), and Micron Technology (MU) were down more than -2%. ARM Holdings Plc (ARM), Broadcom (AVGO), ASML Holding NV (ASML), and Nvidia (NVDA) also saw declines of more than -1%.
- Cleveland-Cliffs (CLF) fell over -17% following a downgrade by Wells Fargo Securities to underweight from equal weight.
- NuScale Power (SMR) dropped more than -8% after Citigroup downgraded the stock to sell from neutral.
- Verizon Communications (VZ) was down over -1% and led losers in the Dow Jones Industrials after a downgrade to neutral from outperform by BNP Paribas Exane.
- Elevance Health (ELV) declined over -1%, despite reporting better-than-expected Q3 operating revenue, due to anticipating a modestly negative Medicaid operating margin for 2025.
- PulteGroup (PHM) decreased over -1% after reporting a Q3 backlog of home orders that fell -18% year-over-year.
Upcoming Earnings Reports
The following companies are scheduled to release their earnings reports on October 21, 2025:
- 3M Co (MMM)
- Agree Realty Corp (ADC)
- Capital One Financial Corp (COF)
- Chubb Ltd (CB)
- Coca-Cola Co/The (KO)
- Danaher Corp (DHR)
- East West Bancorp Inc (EWBC)
- Elevance Health Inc (ELV)
- EQT Corp (EQT)
- Equifax Inc (EFX)
- General Electric Co (GE)
- General Motors Co (GM)
- Genuine Parts Co (GPC)
- Halliburton Co (HAL)
- Intuitive Surgical Inc (ISRG)
- Lockheed Martin Corp (LMT)
- Manhattan Associates Inc (MANH)
- Matador Resources Co (MTDR)
- Mattel Inc (MAT)
- Nasdaq Inc (NDAQ)
- Netflix Inc (NFLX)
- Northrop Grumman Corp (NOC)
- Omnicom Group Inc (OMC)
- PACCAR Inc (PCAR)
- Pegasystems Inc (PEGA)
- Pentair PLC (PNR)
- Philip Morris International Inc (PM)
- PulteGroup Inc (PHM)
- Quest Diagnostics Inc (DGX)
- RTX Corp (RTX)
- Texas Instruments Inc (TXN)
- Valmont Industries Inc (VMI)
- Weatherford International PLC (WFRD)
- Western Alliance Bancorp (WAL)
Market Outlook
The current market landscape is characterized by mixed performance, influenced by a combination of positive corporate earnings reports and ongoing macroeconomic uncertainties, including trade tensions and the government shutdown. Investors are closely observing these factors for indications of future market direction.