Closing Recap

Tuesday, October 28, 2025

Following a roaring recovery day yesterday on trade optimism, US equities were subdued last night with futures flattish into early pre-market trading. Earnings continue to be sufficiently solid with an 87% beat rate and average year/year growth of 17% (median growth 11%) with 181 companies having reported. With no impactful data today and expectations for another 25bps Fed cut tomorrow, equity futures recovered and opened with modest gains. By mid-morning, breadth favored decliners by about 3:2 as small caps underperformed with IWM (-0.28%) versus SPY (+0.09%) and QQQ (+0.33%). Technology, Materials and Consumer Discretionary were outperformers among S&P sector ETFs, while Consumer Staples, Utilities and Real Estate paced the underperformers with only four sectors gaining versus seven declining. In sentiment today, the Fear & Greed Index remained in the Fear zone at 41/100 compared to 29 (Fear) last week, but down from 53 (Neutral) last month. Meanwhile the Conference Board Consumer Confidence measure gained slightly, while the confidence spread held solidly positive with no recession indications.

In data of note today, per @bespokeinvest, over the past five trading days, Technology (XLK) is the only sector ETF to have outperformed the S&P 500 … another illustration of leadership and concentration in this market. On rates, with the Fed decision coming tomorrow, @charliebillelo takes a stand, noting the 2% target is a fairytale with the Fed cutting into 4% average inflation since 2020. His take: if they had any backbone, they would hike rates this week. He also noted the last time the Fed cut rates with inflation this high was October 2008, in the midst of recession/bear market. On earnings, @KobeissiLetter noted 59% of companies have beaten revenue expectations thus far in Q3, the highest since 69.1% in Q4 2021. That said, we still have to get through the big tech names before jitters can settle.

Heading into the final hour of trading, large cap US equities enjoyed another day of gains though breadth continued to favor decliners by about 9:7 overall with small caps lower versus SPY and QQQ in the green. Sector performance remained concentrated as well, with only Technology, Consumer Discretionary and Materials seeing gains while Real Estate and Utilities led the rest lower. Tomorrow is Fed day, and we still have several big tech names yet to report earnings, so the remainder of the week is up for grabs.

• Richmond Fed Manufacturing Index Oct: -4 (est -12; prev -17) while Business Conditions: -1 (prev -7); Richmond Fed manufacturing shipments index +4 in October.
• Consumer Confidence for October 94.6 vs estimate of 93.4.
• US August 20-metro area home prices +1.6% (consensus +1.3%) from year ago vs +1.8% in July (previous +1.8%) — S&P Case-Shiller said, US August home prices in 20 metro areas +0.2% seasonally adj (consensus -0.1%) vs -0.1% in July (previous -0.1%).

• December WTI crude futures extended their losing streak to four days as markets attempted to evaluate potential OPEC+ output hikes versus Russia sanctions. New Russia sanctions on the two largest oil producers have not had significant market impact yet but with the two producers accounting for almost half of Russia’s crude exports, perhaps it is too early to assess. Futures slipped again overnight and never round a rally, settling at $60.15/bbl, down $1.16, or 1.89%.

• In Apparel/Footwear Retail: BOOT was downgraded to Neutral at Seaport Global ahead of earnings noting BOOT already reported strong comps for the first four weeks of Q226, meaning its SSS guidance reflects deceleration over the balance of the quarter, and this is mostly due to tougher comparisons over the balance of Q226. VFC shares slumped after forecasts surprise decline in Q3 revenue, overshadowing better-than-expected results for Q2 (sees Q4 revs to fall 1%-3% vs estimates of a 1.54% rise).
• In Tobacco: British American Tobacco (BTI) said it has paused a pilot plan to launch an unlicensed disposable vape in the U.S., as the FDA moves to crack down on unregulated products and speed up licenses. BAT’s previously unreported reversal reveals the complex battle big tobacco faces to compete with a wave of unregulated products, largely from China, that have dented profits reported Reuters.

• In Home Furnishing Retail: Wayfair (W) shares surged after reported much better than expected quarterly revenue and earnings and sees current quarter revenue up mid-single-digits year over year versus estimates of up 3.3%; BBBY shares slipped on mixed results as the company is executing on margin targets for the year (Gross Margin 24%-26%, Ad Rate 13.5%-14.75%), and the company expects notable ad spend improvement in 2026 (to 12% of sales), but to the negative, sales were -18% y/y led by a -20% decline in orders delivered.

• In Ride Hailing/Food Delivery: shares of WRD, PONY moved higher initially after Bloomberg reported UBER may invest about $100M in Pony AI’s Hong Kong listing, which follows its U.S. IPO last year; the offering seeks up to $972M before any upsizing option and is in talks to participate in WeRide Hong Kong listing as well.
• In Autos: KMX will replace USNA in the S&P SmallCap 600 index

• In Package Delivery/Trucking: UPS is a pleasant surprise for transports, as shares surge; Q3 adj EPS $1.74 tops consensus $1.30; Q3 revenue $21.4B vs. est. $20.84B; guides Q4 revs about $24B vs. est. $23.8B; reaffirms FY Capital expenditures of approximately $3.5B and maintains dividend and announced large job cuts, closed 19 buildings in Q3, bringing 2025 total to 93 building closures. CTOS shares slumped after Q3 revenue missed estimates while reaffirms 2025 revenue and Adjusted EBITDA guidance
• In Airlines: U.S. air travel turmoil deepened as nearly 7,000 flights were delayed nationwide on Monday, with air traffic controller absences surging as the federal government shutdown reached its 27th day – Reuters. JBLU reported Q3 results
• In Industrials: AOS reported mixed Q3 as EPS beat/revs missed, said is cautious about remainder of year primarily due to continued headwinds in China market as lowers FY25 revenue view to $3.8B-$3.85B from $3.85B-$3.93B and narrows FY25 adjusted EPS view to $3.70-$3.85 from $3.70-$3.90. CR reported a $0.13 operational EPS beat, led by organic sales and OP$/OPM upside across both and ore orders rose nearly 2% Y/Y, with organic backlog up 16%. In Waste sector, WM posted a miss on top and bottom line for Q3 as adj EPS $1.98 vs est $2.02 on revs $6.443B vs est $6.504B; guides FY revs $25.275B vs est $25.392B.

• In Lending: SOFI reported Q3 revenue $990M vs $895M expected and better EPS, said a record 905,000 new members joined SoFi in the quarter, up 35% from the prior year to 12.6M; raises FY25 adjusted EPS view to $0.37 from $0.31 and boosts FY25 revenue view to $3.54B from $3.38B (est. $3.46B).
• In Crypto: WULF shares bounced early after Q3 results and announced that it has executed a long-term high-performance computing joint venture with Fluidstack, a premier AI cloud platform that builds and operates HPC clusters; GLXY slides after announces private offering of $1.0B of exchangeable senior notes.
• In Brokers & Banking: VIRT was upgraded from Neutral to Buy at Bank America, taking advantage of recent underperformance as its valuation has declined by 24% over the last 90 days to 8x consensus NTM EPS and is now 1STDEV below its 5Y average. In banks, FSUN said it will buy FFWM in a $785 million all-stock deal, the banks announced as FFWM shareholders will receive 0.16083 share of FSUN for each share held.

• CINF reported Q3 EPS beat $2.85 vs. $1.99 driven by better than catastrophe losses and underlying underwriting results.
• EG shares fall as took a $478M reserve charge, mostly related to US casualty reserves in Insurance; announced a closing of $1.2B ADC cover and sale of a $2B book renewal rights to AIG of its retail insurance business.
• HIG Q3 EPS $3.78 tops est. $3.27 driven by low catastrophe losses and solid favorable reserve development while the underlying combined ratio was worse of 88.8% vs. consensus of 90.7% as compared to 94.5% y/y.
• PFG Q3 EPS $2.32 vs. est. $2.20 as Piper noted had noisy results as the annual actuarial review had $0.24 adverse impact with ~2/3 from model refinements with remainder experience driven. The largest business – Retirement & Income Solutions – had $0.03 better earnings with Principal Asset Management $0.10 better.

• INCY shares fell after its annual sales forecast for its blood cancer treatment Jakafi (to $3.05B-$3.8B from $3.0B-%3.5B) after robust demand for the drug helped quarterly revs but said it halted three drug programs.
• KVUE and JNJ were sued by Texas Attorney General claiming they hid Tylenol’s autism risks
• REGN rises on good results as Q3 revenue grows 1% to $3.75B vs. est. $3.58B; Q3 adj EPS $11.83 tops $9.58 consensus, driven by strong product sales; reports strong sales growth for Dupixent and EYLEA HD; updates 2025 R&D expense guidance to $5.68-$5.75B

• In Managed care: UNH better results as Q3 adj EPS $2.92 vs. est. $2.81; Q3 revs $113.16B vs. est. $113.06B; ups FY25 adjusted EPS view to at least $16.25 from at least $16.00 (est. $16.22); Q3 medical-loss ratio, or the share of premiums spent on healthcare costs, was 89.9%, lower than analysts’ expected 90.7%.
• In Medical Devices: PHG shares declined after the FDA issued a warning letter to Philips regarding its medical device facilities in Washington, Pennsylvania, and the Netherlands. DXCM shares slipped late morning after a report by Hunterbrook Capital noted three people with diabetes died following issues with Dexcom’s G7 continuous glucose monitor, according to adverse event reports filed in September with the FDA. https://tinyurl.com/bdfnkt3b

• Precious Metals/miners: shares of silver and gold miners were down early (AEM, AG, CDE, HL, NEM, WPM), tracking falling prices of the metals as silver hit one-month lows as investors turn their attention to the U.S. Federal Reserve policy meeting this week. Gold has sold off five of the past six days, with investors locking in some profit after a stellar run this year.
• In Steel/Industrial metal sector: NUE reported Q3 adj FIFO EPS of $2.63 vs Street’s $2.18, and the guidance range of $2.05-$2.15 provided in mid-September, with Steel Mills earnings accounting for most of the beat vs its model; Q3 EBITDA was $1.26B, down just ~1% q/q vs Q2s $1.27B and up a solid ~45% y/y.
• Rare Earth sector: METC was downgraded from Buy to Hold at Jefferies after results last night and cut tgt to $33 from $45 while continues to believe that Ramaco is well positioned to benefit from an eventual recovery in met coal prices, and it values the company’s coal business alone at ~$15/share.

• In EMS Sector: CLS shares surged in the sector after better results and guidance; Q3 adj EPS $1.58 vs. est. $1.44; Q3 revs rose 28% y/y to $3.19B vs. est. $2.98B; Q3 CCS segment revenue increased 43% compared to Q3 2024; raises 2025 revenue outlook to $12.2B from $11.55B prior and expects 2026 revenue of $16.0B.
• In Software: CFLT delivered solid Q3 results, headlined by subscription revenue of $286M (+19%) and ahead of management guidance of $281-282M (+17% at the midpoint) while Confluent Cloud landed at $161M (+24%) vs Street estimates of $157.9M (+21.4%), and raised its full year guidance by $6.5M at the midpoint and increased its expectation for FQ4 CC mix to 56% from 55%
• In IT Servies & Consulting: FFIV beat consensus FQ425 revenue/EPS by +2%/$0.42, but guided FQ1 and F26 below by -5%/-$0.44 and -2%/-$1.25, respectively promoting a downgrade to Hold from Buy at Needham (guidance implies a weak F1H26 and a rebound to product growth in 2H). CDNS reported a solid beat-and-raise, backlog of $7B and increased FY25 revenue outlook from 12.9% growth to 13.7% growth.
• In Tech/Telecom Equipment: NOK said its board has resolved to issue 166.4M new shares in a directed share issuance to enable NVDA to make a $1B equity investment in Nokia. Nvidia will subscribe for the shares at a subscription price of $6.01 per share. Separately, NOK was upgraded from Hold to Buy at Jefferies saying Nokia is transforming from a predominantly Radio Access-centric business struggling for growth, to one where rising AI data centre exposure of the Optical and IP Networking segments is expected to drive steady growth.

• AMKR reported a Q3 earnings beat on better sales vs consensus that was generally in line to slightly ahead of guidance and also announced that current CEO Giel Rutten will retire at the end of year.
• QRVO shares rose after SWKS agreed to merge with the rival AAPL chip supplier, in cash-and-stock deal that values the combined company at about $22 billion as Qorvo shareholders will receive $32.50 in cash and 0.960 of a Skyworks share for each share held.
• NXPI posted in-line 3Q results and guided 4Q slightly above expectations as upside was driven by Auto, Mobile, and Comms, offset by weaker Industrial & IoT and 4Q revenue is expected to be +4% q/q, above consensus; 3Q GM of 57.0% was in line with consensus and 4Q GM guidance of 57.5% is slightly above.
• RMBS shares fell; reported JunQ EPS in-line with Street and providing a DecQ EPS outlook $0.02 above consensus. Wells Fargo noted with shares up +77% since Q2 results and trading at 31-times its increased 2027 EPS, they are not surprised to see some pullback.
• SMCI, INTC and MU collaborate on record-breaking results for the STAC-M3™ quantitative trading benchmark
• In Memory: SNDK, MU shares slipped early after a report that Samsung is slashing its high-bandwidth memory prices by 30%. Following delays in the certification of its 12-layer HBM3E, Samsung has implemented a 30% price-cutting strategy in an effort to catch up