Stocks Slide on Weakness in Chipmakers

The S&P 500 Index ($SPX) (SPY) today is down -0.37%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.36%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.68%.  December E-mini S&P futures (ESZ25) are down -0.37%, and December E-mini Nasdaq futures (NQZ25) are down -0.70%.

Stock indexes are under pressure today, led by losses in chipmakers after Texas Instruments forecasted Q4 revenue that was below expectations.  Also, Netflix is down more than -9% after reporting weaker-than-expected Q3 EPS.  Other corporate earnings results today are mixed for stocks.  Intuitive Surgical is up more than +16% after boosting its worldwide Da Vinci procedure growth forecast for the whole year.  Also, Capital One Financial is up more than +3% after reporting better-than-expected Q3 adjusted EPS.

US MBA mortgage applications fell -0.3% in the week ended October 17, with the purchase mortgage sub-index down -5.2% and the refinancing sub-index up +4.0%.  The average 30-year fixed rate mortgage fell -5 bp to 6.37% from 6.42% in the prior week.

The markets are focusing on progress in US-China trade talks, as President Trump reiterated his threat on Monday to boost tariffs on Chinese goods "if there isn't a deal" by November 1.  President Trump is scheduled to meet Chinese President Xi Jinping next week on the sidelines of the Asia-Pacific Economic Cooperation conference in South Korea.   

The shutdown of the US government continues into its fourth week, weighing on market sentiment and delaying key economic reports.  The government shutdown means delays in the release of government reports, including the last three weeks of weekly initial unemployment claims and the September payroll report.  The Bureau of Labor Statistics (BLS) said the September consumer price report, which was initially scheduled to be released last Wednesday, will be released this Friday.  The White House has warned that if the government shutdown lingers, it would trigger widespread dismissals of employees in government programs that don't align with President Trump's priorities.  Bloomberg Economics estimates that 640,000 federal workers will be furloughed during the shutdown, which would expand jobless claims and push the unemployment rate up to 4.7%.

The markets this week will focus on earnings results as the Q3 earnings season continues.  Rising corporate earnings expectations are a bullish backdrop for stocks.  According to Bloomberg Intelligence, 85% of the S&P 500 companies that have reported so far have beaten forecasts, on course for the best quarter since 2021. Also, more than 22% of companies in the S&P 500 that have provided guidance for their Q3 earnings results are expected to beat analysts' expectations, the highest in a year.  However, Q3 profits are expected to have risen by +7.2% y/y, the smallest increase in two years.  Also, Q3 sales growth is projected to slow to +5.9% y/y from 6.4% in Q2. 

The markets are pricing in a 97% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29. 

Overseas stock markets are lower today.  The Euro Stoxx 50 is down -0.43%.  China's Shanghai Composite closed down -0.07%.  Japan's Nikkei Stock 225 closed down -0.02%.

Interest Rates

December 10-year T-notes (ZNZ5) today are down -3 ticks.  The 10-year T-note yield is up +1.0 bp to 3.972%.  Supply pressures are weighing on T-notes as the Treasury will auction $13 billion of 20-year T-bonds later today.  Losses in T-notes are contained due to the ongoing US government shutdown, which could lead to additional job losses, reduced consumer spending, and a weakened US economy, potentially allowing the Fed to continue cutting interest rates. 

European government bond yields are mixed today.  The 10-year German bund yield is up +1.6 bp to 2.568%. The 10-year UK gilt yield dropped to a 6.5-month low of 4.369% and is down -5.5 bp to 4.422%.

UK Sep CPI rose +3.8% y/y, unchanged from Aug and weaker than expectations of +4.0% y/y.  Sep core CPI unexpectedly eased to +3.5% y/y from +3.6% y/y in Aug, weaker than expectations of +3.7% y/y.

ECB Vice President Guindos said, "The current ECB interest-rate level is adequate as the path forward for inflation looks positive," and risks to the outlook for consumer-price growth are balanced.

Swaps are discounting a 2% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.

US Stock Movers

Netflix (NFLX) is down more than -9% to lead losers in the S&P 500 and Nasdaq 100 after reporting Q3 EPS of $5.87, well below the consensus of $6.94. 

Texas Instruments (TXN) is down more than -5% to lead chipmakers lower after forecasting Q4 revenue of $4.22 billion to $4.58 billion, with the midpoint below the consensus of $4.50 billion. Also, Microchip Technology (MCHP), Lam Research (LRCX), Advanced Micro Devices (AMD), and Intel (INTC) are down more than -3%.  In addition, Analog Devices (ADI), Marvell Technology (MRVL), KLA Corp (KLAC), ARM Holdings Plc (ARM), and ON Semiconductor (ON) are down more than -2%.

Cryptocurrency-exposed stocks are sliding today, with the price of Bitcoin down more than -2%.  As a result, Coinbase Global (COIN), Galaxy Digital (GLXY), MARA Holdings (MARA), Riot Platforms (RIOT), and Strategy (MSTR) are down more than -3%.

AST SpaceMobile (ASTS) is down more than -12% after announcing a private offering of $850 million of convertible senior notes due 2036. 

GE Vernova (GEV) is down more than -8% after reporting Q3 EPS of $1.64, weaker than the consensus of $1.86.

Manhattan Associates (MANH) is down more than -5% after reporting that its Q3 remaining performance obligations (RPOs) amounted to $2.077 billion, below the consensus of $2.088 billion. 

Mattel (MAT) is down more than -2% after reporting Q3 net sales of $1.74 billion, weaker than the consensus of $1.84 billion. 

Commercial Metals (CMC) is down more than -2% after Jeffries downgraded the stock to hold from buy. 

Intuitive Surgical (ISRG) is up more than +16% to lead gainers in the S&P 500 and Nasdaq 100 after boosting its worldwide Da Vinci procedure growth forecast for the whole year.

Pegasystems (PEGA) is up more than +10% after reporting Q3 revenue of $381.4 million, well above the consensus of $351.8 million. 

Hilton Worldwide Holdings (HLT) is up more than +4% after raising its full-year adjusted Ebitda to $3.69 billion-$3.72 billion from a previous forecast of $3.65 billion-$3.71 billion, above the consensus of $3.68 billion. 

Capital One Financial (COF) is up more than +3% after reporting Q3 adjusted EPS of $5.95, well above the consensus of $4.39. 

Avadel Pharmaceuticals (AVDL) is up more than +3% after Alkermes agreed to acquire the company for about $2.1 billion, or $20 per share. 

Alphabet (GOOGL) is up more than +1% on news that Anthropic PBC is in discussions with Google about a deal for cloud computing services valued in the high tens of billions of dollars. 

Amphenol (APH) is up more than +1% after reporting Q3 Ebitda of $1.93 billion, stronger than the consensus of $1.64 billion. 

Earnings Reports(10/22/2025)

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 Machine (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 Technol (WAB), Wyndham Hotels & Resorts Inc (WH).