Key Takeaways
- Major U.S. stock indexes closed higher on Thursday, with the Nasdaq 100 leading gains, driven by energy sector strength and positive corporate earnings reports.
- Rising crude oil prices, spurred by U.S. sanctions on Russian oil producers, boosted energy stocks.
- Several companies, including Dow Inc. and Honeywell International, saw significant stock price increases following better-than-expected quarterly results.
- Negative movers included Molina Healthcare, which dropped sharply after reducing its full-year earnings forecast, and Super Micro Computer due to weaker-than-expected preliminary sales.
- Economic data showed a slight rise in existing home sales, while developments in U.S.-China trade relations and the ongoing government shutdown also influenced market sentiment.
Market Performance Overview
U.S. stock markets concluded Thursday’s trading session on an upward trajectory. The S&P 500 Index ($SPX) recorded a gain of +0.58%, the Dow Jones Industrials Index ($DOWI) rose by +0.31%, and the Nasdaq 100 Index ($IUXX) saw an increase of +0.88%. Correspondingly, December E-mini S&P futures (ESZ25) advanced +0.58%, while December E-mini Nasdaq futures (NQZ25) climbed +0.90%.
Driving Factors for Market Gains
The upward movement in stock indexes was largely propelled by a surge in energy producers. This sector benefited from a more than +5% jump in WTI crude oil prices, triggered by U.S. sanctions on state-run Rosneft PJSC and Lukoil PJSC, two of Russia’s largest oil companies. The sanctions introduced concerns about potential tightening of global oil supplies.
Corporate earnings also played a significant role in lifting market sentiment. Dow Inc. experienced a more than +12% increase in its stock price after announcing third-quarter adjusted operating EBITDA figures that surpassed expectations. Similarly, Honeywell International saw its stock rise by over +6% following the release of its Q3 sales results, which also exceeded analyst forecasts.
Positive Economic Indicators
💡 Thursday’s U.S. economic data provided additional support for the stock market. The report on existing home sales for September indicated a +1.5% month-over-month increase, reaching a 7-month high of 4.06 million units, aligning precisely with market expectations.
Easing Trade Tensions
⚡ Stocks extended their gains in the afternoon trading session as tensions in U.S.-China trade relations appeared to ease slightly. The White House confirmed that President Trump is scheduled to meet with President Xi Jinping next Thursday. This meeting will take place on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea.
Notable Stock Declines
On the downside, Molina Healthcare faced significant pressure, closing down more than -17%. This decline led the health insurance sector lower, following the company’s decision to lower its full-year adjusted EPS forecast. Super Micro Computer (SMCI) also experienced a notable drop, closing down over -8% after reporting preliminary Q1 sales figures that were weaker than anticipated.
Sanctions and Trade Dynamics
The sanctions on Rosneft PJSC and Lukoil PJSC, announced late Wednesday by the Trump administration, were imposed due to what was described as Russia’s lack of serious commitment to a peace process to end the war in Ukraine. These measures could potentially restrict foreign countries and companies from engaging in business with these Russian oil giants and limit their access to the international financial system.
Markets are closely monitoring developments in U.S.-China trade negotiations. President Trump recently restated his intention to increase tariffs on Chinese goods if a trade deal is not reached by November 1. The upcoming meeting between President Trump and President Xi Jinping at the APEC conference is seen as a crucial opportunity for potential de-escalation or progress.
Impact of Government Shutdown
The ongoing U.S. government shutdown, now in its fourth week, continued to weigh on market sentiment. The shutdown has caused delays in the release of key economic reports, including weekly initial unemployment claims and the September payroll report. The Bureau of Labor Statistics has rescheduled the September consumer price report for release this Friday.
The continuation of the shutdown could lead to widespread employee dismissals within government programs not aligned with the current administration’s priorities. Bloomberg Economics estimates that approximately 640,000 federal workers may be furloughed, potentially increasing jobless claims and pushing the unemployment rate to an estimated 4.7%.
Q3 Earnings Season Insights
This week, the focus for investors remains on corporate earnings as the Q3 earnings season progresses. Favorable corporate earnings expectations are generally seen as a positive backdrop for equity markets. Data from Bloomberg Intelligence indicates that 85% of S&P 500 companies that have reported results so far have surpassed earnings forecasts, pointing towards potentially the strongest quarter since 2021.
Furthermore, over 22% of S&P 500 companies providing guidance for their Q3 earnings are expected to outperform analyst predictions, marking the highest such figure in a year. Despite these positive trends, overall Q3 profits are projected to increase by +7.2% year-over-year, representing the smallest gain in two years. Q3 sales growth is also anticipated to slow down to +5.9% year-over-year, compared to 6.4% in the second quarter.
Monetary Policy Expectations
📍 The markets are largely pricing in a 99% probability of a -25 basis point interest rate cut at the upcoming FOMC meeting scheduled for October 28-29.
International Market Movements
Overseas, stock markets presented a mixed performance on Thursday. The Euro Stoxx 50 index closed up by +0.52%, while China’s Shanghai Composite gained +0.22%. Japan’s Nikkei Stock 225, however, closed down by -1.35%.
Interest Rate Environment
December 10-year T-notes (ZNZ5) experienced downward pressure on Thursday, closing down -10 ticks. This resulted in the 10-year T-note yield rising by +4.4 basis points to 3.993%. The pressure on T-notes was partly driven by inflation concerns, as the sharp increase in WTI crude oil prices contributed to higher inflation expectations, pushing the 10-year breakeven inflation rate to a one-week high of 2.31%. The rally in stocks also reduced the demand for T-notes as a safe-haven asset.
However, T-notes continue to find support from the ongoing U.S. government shutdown. The potential for further job losses, reduced consumer spending, and a weakened U.S. economy could provide the Federal Reserve with grounds for continued interest rate cuts.
European government bond yields also moved higher on Thursday. The 10-year German bund yield increased by +2.0 basis points to 2.583%, and the 10-year UK gilt yield rose by +0.6 basis points to 4.423%.
📊 The Eurozone’s October consumer confidence indicator unexpectedly rose by +0.7 to -14.2, reaching an 8-month high and exceeding the forecasted decline to -15.0.
Swaps are currently indicating a 1% chance of a -25 basis point rate cut by the European Central Bank (ECB) at its next policy meeting on October 30.
U.S. Stock Mover Highlights
Energy Sector Strength
Energy stocks and service providers saw gains on Thursday, buoyed by the more than +5% surge in WTI crude oil prices to a two-week high. APA Corp (APA) closed up over +7%, and Valero Energy (VLO) rose more than +6%. Other notable gainers in the energy sector included Diamondback Energy (FANG), Marathon Petroleum (MPC), Halliburton (HAL), Baker Hughes (BKR), Devon Energy (DVN), and Phillips 66 (PSX), all closing up more than +3%. Occidental Petroleum (OXY) and ConocoPhillips (COP) also finished the day higher, with gains exceeding +2%.
Quantum Computing Stocks Rally
Quantum computing stocks experienced a rally on Thursday following a Wall Street Journal report indicating discussions between these firms and the Commerce Department about potential equity stakes in exchange for federal funding. IonQ (IONQ), Rigetti Computing (RGTI), D-Wave Quantum (QBTS), and Quantum Computing (QUBT) all closed up more than +6%.
Notable Losers and Gainers
Molina Healthcare (MOH) was a significant laggard, closing down more than -17% and leading the S&P 500 losers. The company revised its full-year adjusted EPS forecast downward to $14.00 from $19.00, falling short of the consensus estimate of $18.65. Centene (CNC) closed down -5%, and Oscar Health (OSCR) fell by more than -3%.
Dow Inc. (DOW) topped the S&P 500 gainers, rising over +12% after reporting Q3 adjusted operating EBITDA of $868 million, significantly higher than the consensus of $759.7 million. Las Vegas Sands (LVS) also saw a substantial increase of over +12% after its Q3 net revenue of $3.33 billion surpassed the consensus estimate of $3.04 billion.
West Pharmaceutical Services (WST) closed up more than +10% after raising its full-year adjusted EPS estimate to $7.06-$7.11 from a previous range of $6.65-$6.85. Dover Corp (DOV) gained over +8% after increasing its full-year adjusted EPS estimate from continuing operations to $9.50-$9.60, up from $9.35-$9.55.
Honeywell International (HON) led gains in both the Dow Jones Industrials and Nasdaq 100, with its stock closing up more than +6%. This rise followed the company’s Q3 sales report of $10.41 billion, which exceeded the consensus estimate of $10.15 billion.
TransUnion (TRU) finished the day up more than +3% after reporting Q3 adjusted EPS of $1.10, above the consensus of $1.05.
Trucking Sector Weakness
Trucking companies experienced a downturn on Thursday. Knight-Swift Transportation (KNX) led the declines with a -7% drop after forecasting Q4 adjusted EPS between 34 and 40 cents, falling below the consensus midpoint of 39 cents. Saia Inc (SAIA) closed down over -5% on the news, while Schneider National (SNDR) and Old Dominion Freight Line (ODFL) both saw declines of more than -3%.
Super Micro Computer (SMCI) continued its downward trend, closing down more than -8%. This move came after the company reported preliminary Q1 sales of $5.00 billion, significantly below the consensus estimate of $6.49 billion.
Southwest Airlines (LUV) closed down by more than -6% following its Q3 operating revenue report of $6.90 billion, which was slightly below the consensus of $6.92 billion.
Roper Technologies (ROP) led the Nasdaq 100 losers, closing down more than -5%. The company issued a Q4 adjusted EPS forecast from continuing operations of $5.11 to $5.16, which was weaker than the consensus estimate of $5.24.
T-Mobile US (TMUS) declined by more than -3% after reporting Q3 revenue of $21.96 billion, slightly missing the consensus of $21.98 billion.
Moderna (MRNA) closed down more than -2% after announcing that its vaccine candidate for cytomegalovirus, a common cause of birth defects, did not meet its primary goal in a late-stage clinical trial.
Upcoming Earnings Reports
📌 On October 24, 2025, the following companies are scheduled to release their earnings reports: Booz Allen Hamilton Holding Co (BAH), First Hawaiian Inc (FHB), General Dynamics Corp (GD), Gentex Corp (GNTX), HCA Healthcare Inc (HCA), Illinois Tool Works Inc (ITW), and Procter & Gamble Co/The (PG).
Expert Summary
Thursday’s market activity saw major U.S. indexes finish higher, with energy stocks leading the charge on rising oil prices and several companies reporting positive earnings surprises. However, concerns lingered due to the ongoing government shutdown and mixed corporate outlooks in certain sectors. Investors continue to focus on earnings season and upcoming inflation data.