Stocks Decline Due to Chipmaker Struggles and Escalating Tensions with China

Market Performance: Major U.S. stock indexes closed lower on Wednesday, with the S&P 500 down -0.53% and the Nasdaq 100 down -0.99%, influenced by disappointing earnings from Netflix and Texas Instruments, alongside ongoing trade tensions with China.

Government Shutdown Impact: The U.S. government shutdown, now in its fourth week, is affecting market sentiment and delaying key economic reports, with estimates suggesting that 640,000 federal workers may be furloughed, potentially increasing jobless claims.

Earnings Season Insights: The Q3 earnings season shows rising expectations, with 85% of S&P 500 companies beating forecasts, although overall profit growth is projected to be the smallest in two years at +7.2% year-over-year.

Interest Rates and Bonds: The market anticipates a 97% chance of a -25 basis point rate cut at the upcoming FOMC meeting, with T-notes gaining due to stock market declines and strong demand in Treasury auctions, while European bond yields showed mixed results.