Stocks face earnings test with S&P 500 on pace for worst performance in a shutdown since 1990

Markets are nearing a decisive moment as investors navigate the uncertainties of a government shutdown this month, compounded by renewed fears of tariffs that emerged on Friday.

In the upcoming week, major Wall Street banks will unofficially kick off the earnings season for the third quarter, presenting a possible trigger for market movements during a time described as a “vacuum of government data,” according to Michael Arone, chief investment strategist at State Street Investment Management, in a recent interview. He expressed being “uncomfortably bullish” regarding the U.S. stock market, highlighting that analysts have increased their projections for the quarterly outcomes of S&P 500 firms.

• This stock market seems irrational

• ‘I’m confused’: After charging $3,000 on vacation, my credit score dropped. Why the fluctuation?

• My late uncle’s wife is threatening legal action against me for funds from my grandmother’s estate. Should I be concerned?

• New IRS tax brackets for 2026 have been revealed. Check your eligibility.

• Will the stock market be operational today? Are postal services running on Columbus Day/Indigenous Peoples’ Day?

“Expectations have been raised at a time when prices are reaching unprecedented levels and valuations are notable stretched,” Arone mentioned. “The margin for error is minimal and the risks of disappointment are significant.”

Last Wednesday, the S&P 500 SPX achieved its 33rd record close of the year, even as the government shutdown progressed following its Oct.1 start. However, on Friday, President Donald Trump’s warning of a “massive increase” of tariffs on Chinese imports erased the weekly gains of the S&P 500. Consequently, the index is down 2% during the ongoing shutdown, positioning it for its weakest performance in one since 1990, according to Dow Jones Market Data.

The shutdown has resulted in investors missing a key U.S. jobs report from the Bureau of Labor Statistics at the beginning of October. Additionally, the BLS is postponing the release of inflation data from the consumer-price index that was originally scheduled for this Wednesday, now moved to Oct. 24.

The postponement of critical governmental reports like the CPI inflation analysis only adds to the “fog” surrounding the U.S. government shutdown, according to David Kelly, chief global strategist at J.P. Morgan Asset Management. “The pressing concern is how much tariffs are impacting higher core goods prices,” he stated in a phone conversation.

Upcoming earnings announcements from JPMorgan Chase & Co. JPM, Wells Fargo & Co. WFC, Citigroup Inc. C, and Goldman Sachs Group Inc. GS on Tuesday, followed by Bank of America Corp. BAC and Morgan Stanley MS on Wednesday, will shed light on the economy and consumer behaviors, alongside insight into Wall Street profitability.