Market Wrap
Published
The S&P 500 closed little changed, with SPY essentially flat, as a heavy slate of bank earnings and an escalating Strait of Hormuz standoff pulled the index in opposite directions throughout the session. The Dow fell 0.38% to 51,654.31 and the Nasdaq slipped 0.17% to 27,199.68.
Energy was the standout sector, with XLE up 1.8% as WTI crude settled up 0.43% at $94.14 a barrel following a reported tanker fire near the Strait of Hormuz and an Iranian naval commander saying forces were awaiting US ships to approach the strait. Brent, by contrast, settled down 0.9% at $105.69. Saudi forces struck an oil facility in Sanaa, Houthi missiles were intercepted near Riyadh, and Trump said a decision on Iran "will be made very soon" while accusing the Houthis of trying to drive up oil prices at Tehran's behest. Natural gas jumped, with UNG up 4.6%.
Health Care was the worst-performing sector, with XLV down 1.3%, dragged by Johnson & Johnson's 5.6% decline despite the company posting in-line earnings and raising full-year guidance. Financials (XLF, -0.3%) were mixed as earnings season opened: Goldman Sachs beat estimates and rose, Citigroup beat but still fell sharply, down 5.5% for its biggest drop since July, while Wells Fargo dropped 3.1% and JPMorgan Chase slipped 0.7% after both missed on revenue despite higher profit. Bank of America also faces a $1.2 billion fine over money laundering failures. Technology (XLK, -0.1%) saw sharp divergence, with Oracle up 4.2% while Applied Materials tumbled 6.9% and memory and storage names including Micron, Lam Research and KLA Corp fell 3-5% on broad chip weakness. Industrials (XLI, -0.3%) were weighed down by Caterpillar's 3.4% decline.
Several Fed officials offered conflicting signals. Richmond's Barkin said 2% inflation is achievable, Atlanta's Collins said she expects a further rate increase this year and sees inflation staying above target on energy and data-center buildout pressures, Goolsbee warned that tariffs and oil prices could lead to stagflation and called AI an inflation problem, while Waller said AI could widen GDP per capita and that real yields reflect real growth. Williams said she sees no need for a 2027 rate hike at this time. Existing home sales rose to a 3.99 million annual rate in September, above the 3.95 million expected.
Company News
- JPMorgan Chase posted Q3 EPS of $5.75, missing on revenue of $50.91 billion versus $51.65 billion expected; CEO Jamie Dimon said buybacks were reduced as the bank deploys capital at attractive returns.
- Goldman Sachs reported Q3 EPS of $17.01, well above expectations, on revenue of $18.68 billion.
- Wells Fargo missed slightly on both EPS and revenue, though it raised its quarterly dividend to $0.50.
- Citigroup beat on EPS at $2.85 and said it expects to exceed its full-year return target, but shares fell anyway.
- UnitedHealth Group beat estimates with Q3 EPS of $4.69 and raised full-year adjusted guidance to at least $20.50 per share.
- Johnson & Johnson reported in-line EPS and raised full-year sales and EPS guidance.
- Kroger plans to cut about 3,000 corporate jobs, more than 37% of its corporate workforce, following Albertsons' $8 billion demand after their collapsed merger; Albertsons separately posted Q2 EPS of $0.36 and withdrew its fiscal 2026 outlook.
- Arm lost a jury verdict in its license dispute with Qualcomm on four of six claims, though damages on the other two were nominal; shares fell about 1%.
- Workday agreed to acquire ConductorOne, SSR Mining is buying Roxmore Resources for roughly $464 million in equity value, and Ithaca Energy is acquiring Bumble at $6.05 per Class A share in cash.
- JPMorgan and Goldman Sachs are limiting their exposure to Volta Infrastructure's $5 billion AI data center loan, underwriting only $1.3 billion of it, with the unrated remainder marketed near an 11% yield.