With Congress still at an impasse, the Senate adjourned Thursday and is scheduled to reconvene Monday afternoon. Market reaction to the budget standoff was muted, and traders focused instead on macroeconomic indicators and earnings.
Trade headlines generate limited market response
Developments on the trade front failed to sway equity prices. President Donald Trump on Friday canceled talks with Canada after an advertisement featuring former President Ronald Reagan criticized tariffs. Separately, the White House confirmed that Trump will meet Chinese President Xi Jinping during an Asia trip next week. Neither announcement altered the overall risk tone.
Earnings season exceeds expectations
Roughly 30% of S&P 500 constituents have reported quarterly results, and 87% have surpassed profit estimates, far above the historical average beat rate of 67%, according to LSEG data. Solid numbers from industrial, financial and technology-linked companies contributed to the week’s rally.
Danaher delivered higher-than-expected revenue and earnings on Tuesday and issued an upbeat initial forecast for its next fiscal year. Shares of the life-sciences firm jumped nearly 6.7% for the week, making it the second-best performer in a closely watched portfolio of large-capitalization names.
Capital One reported a sizable earnings beat Tuesday evening, driven by stronger-than-projected credit metrics. The credit-card issuer’s stock added about 6.5% for the week, ranking fifth among portfolio gainers.
GE Vernova, which manufactures natural-gas turbines, announced robust earnings and backlog growth on Wednesday. Despite the positive fundamentals, the stock slipped 2.6% over the week amid weakness in speculative corners of the energy sector. Even with the pullback, GE Vernova remains up more than 77% year to date.
Honeywell surpassed expectations on sales, earnings and organic growth Thursday and raised its full-year outlook. The industrial conglomerate also highlighted a rebound in its aerospace division ahead of the planned Oct. 30 spinoff of Solstice Advanced Materials. Honeywell shares advanced nearly 6.5% over the five sessions.
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Dover posted better-than-anticipated third-quarter profit on Thursday, increased full-year guidance and pointed to opportunities tied to artificial-intelligence infrastructure. The stock rallied almost 6.6% for the week, its second-strongest weekly showing of the year.
Portfolio adjustments and new positions
In portfolio activity, analysts initiated a position in Corning, citing expected demand for the company’s specialty glass and fiber-optic products as AI-driven data-center construction accelerates. Apple’s previous $2.5 billion commitment to Corning was also highlighted as a strategic advantage.
Separately, profits were taken in Wells Fargo following a sharp post-earnings rally, yielding a roughly 170% gain on shares purchased in January 2021. A partial stake in Eaton was also sold after the electrical-equipment maker recovered from an earlier sell-off linked to cautious guidance.
Texas Roadhouse was downgraded due to sustained pressure from elevated beef prices, a trend expected to weigh on margins through 2026. Management’s limited ability to offset costs with menu-price increases was cited as an ongoing concern.
Earnings calendar ahead
The coming week features reports from 10 prominent companies: Amazon, Apple, Bristol Myers Squibb, Boeing, Corning, Eli Lilly, Linde, Meta Platforms, Microsoft and Starbucks. Each update will be evaluated for potential adjustments to ratings and price targets.
Despite political uncertainty and scattered trade headlines, the market’s focus remains on economic data and corporate fundamentals. As long as inflation stays contained and earnings continue to outpace expectations, investors appear willing to keep pushing equity benchmarks to new highs.
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