Key Highlights

  • The S&P 500 climbed in 12 of 21 past shutdowns with index data, and averaged roughly 0.1% during them.
  • The 10-year Treasury yield was 31 basis points above the 2-year on October 22, down from 40 on September 1.
  • Valero closed with a loss of 2.40% on October 22 after a 12.56% adjusted earnings per share surprise, on a day the S&P 500 declined 1.21%.
  • Honeywell raised 2026 adjusted earnings per share guidance to $8.40 to $8.45 but was trading lower by 3.13% in premarket, then finished up by 1.67% at $218.31.
  • In ATTR-ACT, a win ratio of 1.70 corresponds to win odds of roughly 1.16, calculated.

Why Do Stocks Fall After Earnings Beats, and What Do Guidance, Priced-In Expectations and the Yield Curve Mean?

October 22 supplied the examples. Bloom Energy (NYSE:BE) disclosed EPS of $0.94 against $0.68 and declined about 5.9% after hours, while Honeywell (NASDAQ:HON) raised guidance and still declined 3.13% in premarket. The S&P 500 declined 1.21% to 7,663.43 as the 10-year yield sat 31 basis points above the 2-year. Aardvark Therapeutics (NASDAQ:AARD) saw its FDA clinical hold lifted after 161 days, calculated. History shows the S&P 500 positive in 12 of 21 shutdowns, and win odds of about 1.16 sit against a win ratio of 1.70.

Win Odds: How Do Ties Change What a Clinical Trial Result Says?

The win ratio divides treatment wins by losses across every treated-versus-control patient pair, whereas win odds add half of the tied pairs to both sides. In ATTR-ACT, 264 patients on tafamidis faced 177 on placebo, giving 8,595 wins and 5,071 losses. The win ratio was 1.70 with a p-value of 0.0006, but 33,062 of 46,728 pairs, both calculated, were undecided, which puts win odds near 1.16. The same data looks dramatic or limited depending on the method.

Clinical Holds: How Does the FDA Impose and Lift One?

A hold stops a study from starting or continuing until the FDA notifies the sponsor. The agency must explain a hold in writing inside 30 days, and after a complete response it has 30 days to say whether the hold is removed or maintained. Aardvark's full hold of May 14 was lifted on October 22. Biohaven (NYSE:BHVN) shows a partial hold on new enrollment from September 10, after which the shares moved lower roughly 15%. A lift is a step toward resuming a trial, not toward approval.

Shutdown History: Do Government Shutdowns Usually Hurt the S&P 500?

Not in a lasting way. The index climbed in 12 of 21 past shutdowns with data, roughly 57%, calculated, alongside an average return of roughly 0.1% during them. The average 12-month return after a shutdown since 1980 is 16.95%. No shutdown is in effect now, with funding secured through December 11, 2026, and the record is 43 days, from October 1 to November 12, 2025, which is 2.7 times the 16 days of 2013, calculated.

The Yield Curve: What Is It Telling Investors With the 10-Year 31 Basis Points Above the 2-Year?

The curve is upward sloping, not inverted. On October 22 it showed 4.22% for 3 months, 4.65% for 2 years and 4.96% for 10 years, so the 10-year was 31 basis points above the 2-year and 74 above the 3-month bill, calculated. The gap has narrowed from 40 basis points on September 1 and 51 on May 1 because the 2-year climbed 26 basis points against 17 for the 10-year. Valley National (NASDAQ:VLY) disclosed a net interest margin of 3.28%, up from 3.05%.

Beat but Stock Falls: How Should Investors Read a Negative Reaction to Good Results?

Shares can drop after a beat when guidance, cash generation or the prior run-up disappoints. Bloom Energy's 38.2% EPS surprise, calculated, came with third-quarter free cash flow of about negative $181 million. Deckers (NYSE:DECK) beat with EPS of $2.31, though roughly $0.28 came from tariff refunds, and it cut its expected sales. On Friday, western Digital (NASDAQ:WDC) guided revenue 10.9% exceeding projections, calculated, but traded 0.9% lower in premarket. Valero (NYSE:VLO) fell by 2.40% at $426.28.

Guidance vs Headline EPS: Why Does the Outlook Move Shares More?

A beat describes a finished quarter, whereas guidance describes what the leadership team anticipates next. Honeywell's raised EPS range had a midpoint of $8.425, 1.4% above the $8.31 consensus, calculated, but 2026 sales guidance of $20.0 billion to $20.1 billion sat slightly below the $20.15 billion anticipated. Dover (NYSE:DOV), with a narrowed range near the $10.67 consensus, closed with a loss of 2.18%. Deckers' sales range midpoint declined roughly 2.9%, calculated, even as its EPS range climbed.

Priced In: How Much Good News Did this week's Rally Already Reflect?

Reactions suggest the answer depends on expectations. PulteGroup (NYSE:PHM) disclosed EPS of $2.53 against $2.96 a year earlier, down roughly 14.5%, calculated, but closed with a gain of 5.84%. Tractor Supply (NASDAQ:TSCO) recorded comparable sales growth of just 0.4% and finished up by 6.24%. The S&P 500 advanced 0.6% on October 21 in advance of falling 1.21%, leaving week-to-date moves of approximately +0.1% for the S&P 500 and -0.5% for the Nasdaq Composite, calculated.

Market Explainers Compared: What Do the Figures Reveal Side by Side?

Honeywell's premarket drop of 3.13% and its close up 1.67% are 4.80 percentage points apart, calculated. Pulte's gain of 5.84% on lower EPS contrasts with Valero's 2.40% decline on a 12.56% beat. The 2-year to 10-year gap narrowed by 9 basis points since September 1 and 20 since May 1, both calculated.

December 11 is 49 days from October 23, calculated. Aardvark's 161-day hold is over five times the 30-day window for the FDA's written reply, calculated.

Which Upcoming Developments Matter for Fed Meeting on October 27 to 28 and the December 11 Funding Deadline?

With the target range at 3.75% to 4.00%, and the October consumer price report comes after on November 10, The Federal Open Market Committee meets October 27 to 28. Funding runs through December 11, two days after the Fed's December 8 to 9 meeting. Aardvark must align with the FDA on a new Phase 3 design, and Honeywell's fourth-quarter EPS guide of $2.42 to $2.47 is the next reference point.