Stocks Closed Lower Yesterday, More Earnings On Deck Today
Stocks closed lower yesterday with all of the indexes in the red. Big tech was hit the hardest with the Nasdaq down -2.04%. But small-caps also got hit with a loss of -1.78%.
In spite of robust earnings from Palantir the day before (110% quarterly EPS growth rate vs. this time last year), they dropped on the open yesterday, and that appeared to set the stage for the rest of the day.
Yesterday, before the open, we heard from Shopify. They met EPS expectations, and posted a positive sales surprise of 3.34%. That translated to a quarterly EPS growth rate of -5.56% vs. this time last year, and a sales growth of 31.5%. Of note, they cited success with their AI integration. Nonetheless, they were off -6.94% in the regular session following earnings. Although, for context, they came into the day with a 62.6% YTD gain.
Uber reported before the open as well and posted a positive EPS surprise of 364%, and a positive sales surprise of 1.52%. That equated to a quarterly EPS growth rate of 159%, and a sales growth of 20.4%. They were off -5.06% yesterday. But, again, for context, they came into the day with a 65.3% YTD gain.
After the close, Advanced Micro Devices reported a positive EPS surprise of 2.56%, and a positive sales surprise of 6.00%, for a quarterly EPS growth rate of 30.4%, and a sales growth of 35.6%. In addition to record quarterly results, they increased their quarterly revenue guidance by 4.68% above the consensus. They were down by -3.70% in the regular session before earnings, and were lower by nearly -3% in after-hours trade following earnings.
Arista Networks reported after the bell and posted a positive EPS surprise of 4.17%, and a positive sales surprise of 2.11%, for a quarterly EPS growth rate of 25%, and a sales growth of 27.6%. While they guided quarterly revenue above expectations, it was only by 0.86%. Although, that would still represent a quarterly sales growth of 21.7%. They were down by -2.56% in the regular session, and fell by more than -10% in after-hours trading. I would chalk some of that drop to the unluck of the draw -- reporting on a broader down day when tech was under pressure.
Today we'll hear from another 534 companies including Novo Nordisk and Qualcomm before the open, and AppLovin, ARM Holdings and DoorDash after the close.
On the economic report front yesterday, we were supposed to get Motor Vehicle Sales, Factory Orders, the International Trade in Goods and Services report, and the Job Openings and Labor Turnover Survey report (or JOLTS for short). But they were all delayed due to the government shutdown.
Today we are supposed to get MBA Mortgage Applications, the ADP Employment Report, the PMI Composite Index, and the ISM Services Index. Since those reports are compiled by private organizations, they are all expected to be released as normal.
As for the government shutdown, today marks day 36, making it officially the longest government shutdown (since 1980). The previous record was 35 days set back in 2018/2019.
Hopefully, after crossing that milestone, and with the 2025 elections coming to a close, both parties can find an offramp to open the government back up.
Earnings season is still in full swing. And, in aggregate, it’s been another better-than-expected earnings show, so far. Stocks typically go up during earnings season. So far so good, yesterday notwithstanding.
We'll see if the market can regroup today and try heading back up.
See you tomorrow,
Kevin Matras
Executive Vice President, Zacks Investment Research | 
