Closing Recap

Wednesday, October 22, 2025

US equity futures saw small gains overnight with no major trade news and the government still in shutdown. That said, NFLX and TXN earnings disappointments weighed on sentiment and indices went red by mid-morning. Early breadth favored decliners by 3:2 as small caps underperformed with IWM (-0.82%) versus SPY (-0.12%) and QQQ (-0.36%). Early sector performance saw Energy (+0.84%), Health Care (+0.69%) and Consumer Staples (+0.50%) outperforming among S&P sector ETFs, while Communications (-0.40%), Industrials (-0.47%) and Consumer Discretionary (-0.53%) paced the underperformers with five sectors gaining versus six declining. In sentiment, today’s Fear & Greed Index sat at 29/100 (Fear) versus last week’s 30 (Fear) and last month’s 62 (Greed). We have plenty of reports remaining in earnings season and ongoing tariff discussions, so the next move certainly is not a given.

In data of note, as we are seeing today, @bespokeinvest noted the S&P500 remains stuck in a trading range with defensive groups leading gains recently while Energy, Materials, Financials and Tech have weighed. On AI, @charliebilello noted a record 10% of US businesses reported using AI in the last two weeks, versus 6% a year ago. Still plenty of room to the upside from here. Also related to AI, @DataTrekMB noted US large-cap utilities have been beating the S&P 500 ytd (+19.7% versus +14.5%). The move is partially interest rates driven, but there also has been a benefit from expected demand growth on Gen AI adoption. Lastly, on housing, @KobeissiLetter noted the median sale prices for mid & high-priced homes rose 1.4% and 2.7%, respectively, in August while the median sales price of a typical starter home gained 2.2% to a new record $260,508.

Heading into the final hour of trading, stocks were down but off the lows of the day following a roll-on earlier headlines indicating the US was considering curbs on exports to China made with or containing US software. Breadth expanded to favor decliners by 5:2 as small caps continued to underperform with IWM (-1.5%) versus SPY (-0.6%) and QQQ (-1.15%). Sector performance, though, hadn’t shifted significantly. Consumer Staples, Health Care and Energy were outperformers and Communications, Industrials and Technology now led the underperformers, with five sectors gaining versus six declining. Clearly the rotation away some mega caps was impacting indices more than a collapse in breadth, so perhaps another bounce is ahead.

• WTI crude posted a nice bounce today. After moving about 150bps higher overnight, futures extended gains on bullish EIA data. Crude inventories posted a draw versus expectations for a build, while US east coast refinery utilization climbed in the latest week to the highest since January 2023. Less volatile Middle East headlines and a new round of tariff concerns remain bearish, but we still have a data backlog to work through once the government reopens and the Fed will still play a large role. December futures settled today +$1.26/bbl, or +2.2%, at $58.50.

• In Restaurants: Barclays lowered targets for several casual diners/restaurants (BJRI, EAT, CAVA, CMG, BROS, JACK, KRUS, SHAK, SG, TXRH, CAKE while raised tgt for MCD, DIN as part of a Q3 preview for the group saying comparable sales were choppy in the quarter, slowing in September despite an uptick in value offers, with fast casual most impacted, and adds that food inflation spiked for select items, with some restaurants reverting to price despite ongoing traffic weakness.
• In Food: USFD Initiated Outperform and $95 PT, PFGC Outperform and $130 PT and SYY at Market Perform in food distributor new coverage at Bernstein against a backdrop of declining restaurant traffic and pressured consumer spending, with a positive outlook on the food distribution industry, as it believes that it will prove its resilience and defensiveness especially in times of such consumer uncertainty.

• In Casinos & Gaming: DKNG announced the acquisition of Railbird Technologies Inc. and its wholly owned subsidiary, Railbird Exchange LLC, a federally licensed exchange designated by the Commodity Futures Trading Commission to broaden its strategy to enter prediction markets. The NHL announces a licensing deal with Kalshi, Polymarket, which adds to pressure on Sports-Betting companies (DKNG, FLUT, PENN, CZR).
• In Lodging & Online Travel: HLT reported Q3 results above consensus ($2.11/$3.12B vs. est. $2.06/$3.01B) and reports Q3 System-wide comparable RevPAR down -1.1%, on a currency neutral basis, vs. last year and issue upbeat EPS forecast but sees full-year RevPAR to grow up to 1%, compared with its earlier forecast of an up to 2% rise; Hyatt (H) was upgraded Hyatt to Overweight from Equal Weight at Morgan Stanley and raised tgt to $168 from $147 saying they like the company’s sale of Playa real estate and commitment to selling owned and leased hotel assets while also offers higher exposure to the healthier higher-end demand segments. In l=online travel/lodging, Wedbush previewed sector saying BKNG, EXPE ests are achievable for Q3 but are most cautious in ABNB as the alternative lodging data they track has been the softest.
• In Leisure Products: RV company WGO shares jumped after Q4 results topped expectations with EPS $0.71 above consensus $0.52 on revs $777.3M also topping consensus of $726.3M and mid-point of FY adj EPS guidance well above consensus as sees $2.00-$2.70 vs. est. $2.24 (CWH, PATK, THO other RV names)

• In Nuclear: After being among the biggest upside movers in 2025 due to additional power needs to run AI data centers, nuclear powers/SMR names seeing a pullback after inflated stock prices questions on Wall Street, with shares of OKLO, LEU, NNE, SMR among the biggest downside momentum movers recently.
• In Oil & Gas E&P and Equipment: several earnings result out with: EQT with Q3 EPS beat, revenue came in better and sales volumes came in at high end of guidance range. Adj EBITDA ahead of qtr.; WFRD posted a slight Q3 EPS miss, revenue beat, op income in line and said remains on track to meet FY guidance; MTDR posted Q3 EPS beat, adj EBITDA a touch ahead and production came in better while increased FY25 production guidance and expects FY26 capex to be 8-12% lower than 2025; NOG raises FY25 annual production view to 132,500-134,000 Boepd from 130K-133K Boepd; raises FY25 oil production view to 75K-76.5K Boepd from 74K-76K; narrows FY25 total capital expenditures view.

• In Consumer Finance: COF rallies on results as Q3 adj EPS $5.95 vs. consensus $4.36 and revs rose 23% y/y to $15.4B vs. est. $15.08B; authorizes stock buyback of up to $16B; reports Q3 provision for credit losses decreased $8.7B to $2.7B; Q3 non-interest expense increased 18% to $8.3B.
• In Banks: NTRS posted earnings of $457.6 million, or $2.29 a share, down from $464.9 million, or $2.22 a share, a year earlier vs. est. $2.22 while revenue rose 2.8% to $2.03 billion, about in line with estimates; said total assets under custody or administration rose 4.7% to $18.25 trillion. Other bank movers on earnings included CATY, EWBC, FULT and WAL in regionals.
• In Insurance: WRB was downgraded to Underperform at BMO Capital due to what it estimate will eventually (by March ’26) be a re-coupling of WRB’s decelerating fundamentals with current relatively expensive valuation levels. CB reported Q3 EPS $6.99 vs est $6.15; Q3 Net Premiums Written: $14.87B vs est. $14.62B; Q3 Net Premiums Earned: $14.36B vs est. $14.04B; P&C Combined Ratio: 81.8% vs est. 87.1%.

• ARCT shares tumble after saying an initial analysis comparing lung function from day 1 and day 28 after treatment with its experimental cystic fibrosis therapy did not show improvement in a mid-stage study; the experimental inhaled mRNA therapy ARCT-032 generally safe and well tolerated.
• AVDL and JAZZ reach global settlement where Jazz to pay $90M to Avadel and waives Lumryz royalties and AVDL to pay Jazz 3.85% royalties on Lumryz sales until 2036. Avadel and Jazz will dismiss their respective lawsuits with prejudice; Lumryz sales for future FDA indications start March 1, 2028.
• AVDL also agrees to be acquired by ALKS for total transaction consideration of up to $20.00 per share in cash, which values Avadel at approximately $2.1B (transaction valued at $18.50 per share in cash with a CVR for an additional $1.50 per share in cash).
• RAPT said 8.333M share Spot Secondary priced at $30.00.
• SMMT raised $500 million in a private placement, more than half of which is being bought by company insiders, including co-CEO Robert Duggan.
• TERN announced the discontinuation of its obesity asset, TERN-601, following the release of topline 12-week Phase 2 data. The trial revealed a maximum placebo-adjusted weight loss of 4.6% at doses greater than 500 mg, positioning it at the lower end of efficacy compared to other oral GLP-1 receptor agonists
• TNXP announces first patient dosed in the investigator-initiated focus study of Tonix’s intranasal potentiated oxytocin in AVP-d conducted by Massachusetts general hospital.

• In Medical Equipment: ISRG posted Q3 earnings that topped analysts’ estimates ($2.40 vs. est. $1.98) and said it expects growth of its da Vinci robotic surgical system of between 17% and 17.5% this year, higher than its prior forecast for growth between 15.5% and 17%.
• In Medical Devices: BSX posted 3Q results were strong, with revenue of $5B, with Organic Growth of 15.3% (vs. 13% cons) with both Cardio and MedSurg ahead on Organic. In focus was US EP at $607M (+65.8% y/y growth) and Watchman +34.6% growth. EPS also beat with strong GM and OMx despite tariff headwinds
• In Life Science Tools: TMO Q3 adjusted EPS $5.79 tops consensus $5.50 on revs Q3 revenue $11.12B vs. est. $10.91B; said completed acquisitions and collaborated with OpenAI to enhance productivity; said to provide updated 2025 guidance during its earnings call.

• Heavy Machinery trucks: Volkswagen (VWAGY) will halt VW Golf production from next Wednesday due to chip supply issues, Bild reported. Volkswagen said that it was temporarily halting some production but denied any connection with a stand-off over chipmaker Nexperia putting pressure on supply chains. WAB reports Q3 adj EPS $2.32 vs. est. 2.28; Q3 revenue $2.89B vs. est. $2.88B and narrows FY25 adjusted EPS view to $8.85-$9.05 from $8.55-$9.15 (est. $8.97); PCAR was upgraded to Peer Perform at Wolfe.
• In Aerospace & Defense: ACHR named exclusive air taxi partner for the Los Angeles sports and entertainment commission and will serve as official Los Angeles World Cup 2026 host city supporter and official partner for the super bowl LXI host committee. ASTS shares slip after announces $850M convertible senior notes offering.

• In Industrial metals: Bernstein downgrades GLNCY from Outperform to Market-Perform due to several factors including somewhat full valuation – limited upside potential to its price target, with the stock currently trading at a modestly higher multiple; CMC was downgraded to Hold from Buy at Jefferies saying while remains positive on the fundamental outlook for US steel as a whole, it favors flat-rolled steel producers NT as prices have more upside potential than rebar prices following rebar’s outperformance.

• Analog semis/auto chip names fell after TXN reported mixed results as Q3 EPS $1.48 missed est $1.49 on revs $4.742B vs est $4.642B and midpoint of guidance also fell short of consensus as sees Q4 revs $4.22-4.58B vs est $4.507B and EPS $1.13-1.39 vs est $1.41 (shares of ADI, MPWR, NXPI, ON were weaker).
• In Telecom: AT reported mostly in-line Q3 top/bottom line results, said more customers than Wall Street expected had switched to its cellphone plans over the third quarter as added 405,000 monthly bill paying wireless subscribers, compared to expectations for 334,100 additions. In cable, Reuters reported CHTR is laying off close to 1,200 employees, or just over 1% of its 95,000-person workforce.
• In Internet: META announces JV w/ funds managed by Blue Owl Capital to develop Hyperion data center; Meta gave the JV a 16-yr residual value guarantee, promising a capped payout if certain conditions are met after lease termination or non-renewal.
• Anthropic PBC is in discussions with Alphabet Inc.’s (GOOGL) Google about a deal that would provide the artificial intelligence company with additional computing power valued in the high tens of billions of dollars, according to people familiar with the matter. per Bloomberg

• In Electrical/Components: APH shares rise on results as Q3 sales rise 53% y/y, beating analyst expectations and adj EPS for Q3 also topping analyst expectations; announces 52% increase in quarterly dividend to $0.25 per share while guiding Q4 EPS and revs above consensus (EPS $0.89-$0.91 vs. est. $0.80 and revs $6.0B-46.1B vs. est. $5.7B) and better Fy guidance.
• In Software: MANH shares fell 3Q beat was driven by cloud subscription and solid services revenue upside that benefited from pull forward from 4Q, while Stifel noted the full year outlook was raised, the midpoint of 4Q ticked down as a result of the services dynamic and hardware (shares were lower). PEGA shares rose after reporting Q3 adj EPS $0.30 vs est $0.20 on revs +17% y/y to $381.35Mm vs est $345.2Mm sending shares higher and said Pega Cloud ACV increased by 27% y/y
• In AI/Data Centers: VRTthe maker of data-center technology posted robust Q3 earnings and sales growth, forecast further gains in Q4 and boosted its growth projections for the year; raises FY25 adjusted EPS view to $4.07-$4.13 from $3.75-$3.85 and ups FY25 revenue view to $10.16B-$10.24B from $9.93B-$10.08B; the company strong backlog helped boost other data center names.
• In IT Services & Consulting: IT downgraded at Barclays as N-T results remain at risk (BARC’s 2H25E CIO survey turned even more negative; 3Q25e further DOGE risk amidst govt. shutdown, macro impacts called out in Q225 may continue) and M-T expectations for a return of CV growth to HSD LDD in 2026e seem high.
• EDA Secor was hit with SNPS, CDNS sliding after Reuters reported the Trump administration considering plan to restrict globally produced exports to China made with or containing U.S. software; says new export controls under consideration by the U.S. could curb exports on wide range of goods to China.