Stocks Pressured as Texas Instruments Drags Chipmakers Lower

Economic Impact - The US government shutdown is in its fourth week, affecting market sentiment and delaying key economic reports, including unemployment claims and the September payroll report [1] - Bloomberg Economics estimates that 640,000 federal workers will be furloughed, potentially increasing jobless claims and raising the unemployment rate to 4.7% [1] Trade Relations - Markets are focused on US-China trade talks, with President Trump threatening to increase tariffs on Chinese goods if no deal is reached by November 1 [2] Mortgage Applications - US MBA mortgage applications decreased by 0.3% for the week ending October 17, with the purchase mortgage sub-index down 5.2% and refinancing up 4.0% [3] Stock Market Performance - Stock indexes are experiencing modest losses, particularly in chipmakers after Texas Instruments forecasted Q4 revenue below expectations [4] - The S&P 500 Index is down 0.02%, the Dow Jones down 0.14%, and the Nasdaq 100 down 0.18% [5] Earnings Season - The Q3 earnings season shows rising corporate earnings expectations, with 85% of S&P 500 companies reporting so far beating forecasts, indicating the best quarter since 2021 [6] - Q3 profits are expected to rise by 7.2% year-over-year, the smallest increase in two years, while sales growth is projected to slow to 5.9% year-over-year [6] Interest Rates - Markets are pricing in a 97% chance of a 25 basis point rate cut at the next FOMC meeting on October 28-29 [7] - The 10-year T-note yield is up 0.8 basis points to 3.963%, with supply pressures from upcoming Treasury auctions [8] European Market Trends - European government bond yields are mixed, with the 10-year German bund yield up 0.9 basis points and the UK gilt yield dropping to a 6.5-month low [9] Company-Specific Movements - Netflix shares are down over 7% after reporting Q3 EPS of $5.87, below the consensus of $6.94 [11] - Texas Instruments shares are down over 7% after forecasting Q4 revenue of $4.22 billion to $4.58 billion, below consensus [12] - Intuitive Surgical shares are up over 16% after raising its worldwide Da Vinci procedure growth forecast for the year [15] - Capital One Financial shares are up over 3% after reporting Q3 adjusted EPS of $5.95, exceeding expectations [16]