At a Glance
- Major U.S. stock indices experienced slight declines, influenced by mixed corporate earnings and concerns over U.S.-China trade relations.
- Texas Instruments’ weaker-than-expected Q4 revenue forecast impacted chipmakers, while Intuitive Surgical’s boosted guidance lifted its stock.
- The ongoing U.S. government shutdown continues to weigh on market sentiment and delay economic data releases.
- Market participants are keenly focused on the upcoming Federal Open Market Committee (FOMC) meeting, with a high probability of a rate cut expected.
- The Q3 earnings season is underway, showing a high percentage of S&P 500 companies beating forecasts, though profit growth is slowing.
Market Overview
Major U.S. stock indices are posting modest losses today. The S&P 500 Index is down -0.02%, the Dow Jones Industrials Index is off -0.14%, and the Nasdaq 100 Index has dipped -0.18%. Similarly, December E-mini S&P futures are down -0.01%, and December E-mini Nasdaq futures are trading lower by -0.16%.
Corporate Earnings Impact Market Sentiment
The market’s movement is largely driven by corporate earnings reports. Chipmakers faced selling pressure after Texas Instruments forecasted fourth-quarter revenue below analyst expectations. Conversely, Intuitive Surgical saw a significant jump of over +16% following an upward revision of its worldwide Da Vinci procedure growth forecast. Capital One Financial also experienced a rise of over +3% after announcing third-quarter adjusted earnings per share that surpassed expectations. However, Netflix’s stock declined by more than -7% due to weaker-than-expected third-quarter earnings.
Economic Data and Mortgage Applications
In economic news, U.S. MBA mortgage applications decreased by -0.3% for the week ending October 17. The purchase mortgage sub-index fell by -5.2%, while the refinancing sub-index saw an increase of +4.0%. The average 30-year fixed-rate mortgage edged down to 6.37% from 6.42% in the previous week.
Geopolitical and Domestic Concerns Weigh on Markets
Market participants are closely watching developments in U.S.-China trade talks, especially as President Trump has reiterated his threat to increase tariffs on Chinese goods if a deal is not reached by November 1. A potential meeting between President Trump and Chinese President Xi Jinping next week on the sidelines of the Asia-Pacific Economic Cooperation conference in South Korea is also a key focus.
The prolonged U.S. government shutdown, now in its fourth week, continues to dampen market sentiment and disrupt the release of critical economic data. Delays in reporting, including weekly initial unemployment claims and the September payroll report, are creating uncertainty. The Bureau of Labor Statistics announced that the September Consumer Price Index (CPI) report, originally scheduled for last Wednesday, will now be released this Friday.
💡 The White House has cautioned that a prolonged shutdown could lead to widespread employee dismissals in government programs not aligned with President Trump’s priorities. Bloomberg Economics estimates that 640,000 federal workers are furloughed, potentially increasing jobless claims and pushing the unemployment rate to 4.7%.
Q3 Earnings Season Continues Amidst Economic Headwinds
This week’s market focus remains on the ongoing Q3 earnings season. The backdrop of rising corporate earnings expectations is generally supportive of the stock market. According to Bloomberg Intelligence, 85% of S&P 500 companies that have reported thus far have exceeded forecasts, indicating a strong earnings quarter. Furthermore, over 22% of S&P 500 companies providing guidance for Q3 earnings are expected to surpass analyst predictions, the highest proportion in a year.
📍 However, Q3 profits are projected to have grown by +7.2% year-over-year, marking the smallest increase in two years. Additionally, Q3 sales growth is anticipated to moderate to +5.9% year-over-year, down from +6.4% in the second quarter.
Federal Reserve Policy Expectations
The markets are largely pricing in a -25 basis point rate cut at the upcoming FOMC meeting scheduled for October 28-29, with a 97% probability assigned to this outcome.
Global Market Performance
Overseas stock markets are also trading lower today. The Euro Stoxx 50 is down -0.19%. China’s Shanghai Composite closed with a slight decrease of -0.07%, and Japan’s Nikkei Stock 225 finished down -0.02%.
Interest Rate Dynamics
On Tuesday, December 10-year T-notes saw a decline of -2 ticks, with the 10-year T-note yield increasing by +0.8 basis points to 3.963%. Supply concerns are impacting T-notes as the Treasury is set to auction $13 billion of 20-year T-bonds today. However, losses in T-notes are somewhat contained by the ongoing U.S. government shutdown, which could lead to job losses, reduced consumer spending, and a weaker U.S. economy, potentially supporting further Fed rate cuts.
European Bond Market Activity
European government bond yields are mixed. The 10-year German bund yield is up by +0.9 basis points to 2.561%. In contrast, the 10-year UK gilt yield dropped to a 6.5-month low of 4.369%, currently down -7.7 basis points to 4.401%.
📊 UK September CPI rose +3.8% year-over-year, unchanged from August and below the expected +4.0%. Core CPI unexpectedly eased to +3.5% year-over-year from +3.6% in August, also falling short of the forecasted +3.7%.
💡 Swaps are indicating only a 2% chance of a -25 basis point rate cut by the European Central Bank (ECB) at its upcoming policy meeting on October 30.
U.S. Stock Movers: Notable Gainers and Losers
Top Losers
Netflix (NFLX) is down more than -7%, leading the decliners in the S&P 500. The company reported Q3 EPS of $5.87, significantly below the consensus estimate of $6.94.
Texas Instruments (TXN) fell over -7%, dragging down chipmakers. The company’s Q4 revenue forecast of $4.22 billion to $4.58 billion fell short of the consensus expectation of $4.50 billion. Other semiconductor stocks also experienced declines, including Microchip Technology (MCHP) down over -4%, Analog Devices (ADI) down over -3%, NXP Semiconductors NV (NXPI) and ON Semiconductor (ON) both down over -2%, with Marvell Technology (MRVL), GlobalFoundries (GFS), Qualcomm (QCOM), and Intel (INTC) all down more than -1%.
Cryptocurrency-exposed stocks are also sliding, with Bitcoin down over -2%. This has impacted Coinbase Global (COIN), Galaxy Digital (GLXY), MARA Holdings (MARA), Riot Platforms (RIOT), and Strategy (MSTR), all down more than -1%.
AST SpaceMobile (ASTS) is down over -9% following the announcement of a private offering of $850 million in convertible senior notes due 2036.
Manhattan Associates (MANH) is down more than -6% after reporting Q3 remaining performance obligations (RPOs) of $2.077 billion, slightly below the consensus of $2.088 billion.
Mattel (MAT) experienced a decline of over -5% after reporting Q3 net sales of $1.74 billion, which was weaker than the consensus forecast of $1.84 billion.
W R Berkley (WRB) is down by more than -1% after BMO Capital Markets downgraded the stock to underperform from market perform, setting a price target of $64.
Commercial Metals (CMC) is down more than -2% following a downgrade by Jefferies to hold from buy.
Top Gainers
Intuitive Surgical (ISRG) is up more than +16%, leading the gains in the S&P 500 and Nasdaq 100 after increasing its full-year worldwide Da Vinci procedure growth forecast.
Pegasystems (PEGA) is soaring over +15% after reporting Q3 revenue of $381.4 million, significantly exceeding the consensus of $351.8 million.
Amphenol (APH) is up more than +8% following a Q3 EBITDA of $1.93 billion, which was stronger than the consensus of $1.64 billion.
Hilton Worldwide Holdings (HLT) gained over +4% after raising its full-year adjusted EBITDA guidance to $3.69 billion-$3.72 billion from a previous forecast of $3.65 billion-$3.71 billion, surpassing the consensus of $3.68 billion.
Capital One Financial (COF) is up over +3% after reporting Q3 adjusted EPS of $5.95, well above the consensus estimate of $4.39.
Avadel Pharmaceuticals (AVDL) is up more than +3% on the news that Alkermes has agreed to acquire the company for approximately $2.1 billion, or $20 per share.
Vertiv Holdings (VRT) is up over +2% after raising its full-year adjusted EPS forecast to $4.07-$4.13 from a previous estimate of $3.75-$3.85, outperforming the consensus of $3.83.
Alphabet (GOOGL) is up more than +1% on reports that Anthropic PBC is in discussions with Google for cloud computing services valued in the high tens of billions of dollars.
Upcoming Earnings Reports (October 22, 2025)
- Alcoa Corp (AA)
- Amphenol Corp (APH)
- Annaly Capital Management Inc (NLY)
- AT&T Inc (T)
- Avery Dennison Corp (AVY)
- Boston Scientific Corp (BSX)
- CACI International Inc (CACI)
- Churchill Downs Inc (CHDN)
- CME Group Inc (CME)
- Crown Castle Inc (CCI)
- Equity LifeStyle Properties In (ELS)
- First American Financial Corp (FAF)
- FirstEnergy Corp (FE)
- GE Vernova Inc (GEV)
- Globe Life Inc (GL)
- Graco Inc (GGG)
- Hexcel Corp (HXL)
- Hilton Worldwide Holdings Inc (HLT)
- International Business Machines (IBM)
- Kinder Morgan Inc (KMI)
- Knight-Swift Transportation Holdings Inc (KNX)
- Lam Research Corp (LRCX)
- Las Vegas Sands Corp (LVS)
- Lennox International Inc (LII)
- Lithia Motors Inc (LAD)
- Medpace Holdings Inc (MEDP)
- Molina Healthcare Inc (MOH)
- Moody’s Corp (MCO)
- Northern Trust Corp (NTRS)
- NVR Inc (NVR)
- O’Reilly Automotive Inc (ORLY)
- Packaging Corp of America (PKG)
- QuantumScape Corp (QS)
- Raymond James Financial Inc (RJF)
- Reliance Inc (RS)
- Robert Half Inc (RHI)
- SEI Investments Co (SEIC)
- Sonoco Products Co (SON)
- Southern Copper Corp (SCCO)
- SOUTHSTATE BANK CORP (SSB)
- Southwest Airlines Co (LUV)
- Stifel Financial Corp (SF)
- Teledyne Technologies Inc (TDY)
- Tesla Inc (TSLA)
- Thermo Fisher Scientific Inc (TMO)
- Travel + Leisure Co (TNL)
- United Rentals Inc (URI)
- Vertiv Holdings Co (VRT)
- Viking Therapeutics Inc (VKTX)
- Westinghouse Air Brake Technologies (WAB)
- Wyndham Hotels & Resorts Inc (WH)
Expert Summary
U.S. stock markets are experiencing minor dips as investors digest mixed corporate earnings and ongoing geopolitical uncertainties. The technology sector, particularly chipmakers, faced pressure from weaker guidance, while other companies reported strong results. The prevailing U.S. government shutdown and anticipation of a Federal Reserve rate cut are also key factors influencing trading decisions.