Sou Hu Cai Jing·2025-11-03 01:53Core Insights - The article discusses the impact of U.S. government shutdowns and tariff policies on the stock market, particularly focusing on the fluctuations in the S&P 500 index and the implications for economic growth and investor sentiment [2][6]. Economic Impact - The U.S. government shutdown is expected to have a slight negative impact on GDP growth, with the stock market showing resilience initially, as the S&P 500 reached new highs [2]. - The IMF and the Federal Reserve have adjusted their GDP growth forecasts for the U.S. to 2.0% for 2025 and 2.1% for 2026, indicating a potential "soft landing" for the economy [9]. Market Reactions - Following President Trump's announcement of a 100% tariff on China, the S&P 500 experienced a significant drop of 2.71%, marking the largest single-day decline since the implementation of equivalent tariffs [2]. - Investor confidence has been on the rise, with the Sentix investor confidence index recovering from negative territory to a positive value of 4.2 in October [11]. Sector Performance - The technology sector is expected to lead in earnings growth, with the S&P 500 projected to see an earnings growth of 12.6% in 2025 and 13% in 2026, driven by significant capital expenditures in AI [21][41]. - The S&P 500's net profit margin reached 13.5% in Q3 2025, significantly above the 10.5% average from 2020, indicating strong profitability in the current economic environment [32]. Investment Trends - The article highlights a shift in market preference from value stocks to growth stocks, particularly in the technology sector, as AI continues to drive market dynamics [44]. - The capital expenditures of the top ten technology companies are expected to reach $398.2 billion in 2025, reflecting a 58.3% year-over-year increase, which is anticipated to bolster the S&P 500's performance [32][33]. Earnings Reports - As of October 31, 2025, 83% of S&P 500 companies reported earnings above expectations, the highest level in 17 quarters, with a notable 10.7% year-over-year growth in actual EPS for Q3 2025 [37].