Stocks Brace for Earnings Test: S&P 500 Faces Worst Shutdown Slump Since 1990
As the U.S. government shutdown drags into its 12th day, Wall Street is navigating a perfect storm of uncertainty—tariff threats, delayed data, and an earnings season that could make or break the S&P 500’s record run. On October 12, 2025, MarketWatch reported the S&P 500 (SPY) is on track for its worst performance during a government shutdown since 1990, down 2% since October 1 amid tariff fears and a data blackout. This S&P 500 shutdown performance 2025 narrative fuels trending searches like stocks earnings test 2025, S&P 500 government shutdown impact, tariff fears stock market, Wall Street banks earnings Q3, and market volatility October 2025. With SPY at $653.02 (per the finance card above), down from a high of $673.95, investors are jittery. Let’s unpack the chaos, from bank earnings to historical patterns, and what it means for U.S. portfolios.The Shutdown Sting: Why This Time’s Different
The shutdown, sparked by Congress’ failure to pass 2026 fiscal funding, has furloughed 900,000 federal workers and delayed key data like the CPI inflation report (pushed to October 24). President Trump’s October 10 threat of “massive” Chinese tariffs—potentially 60%—wiped out SPY’s weekly gains, sending it from $671.16 (October 9 close) to $652.15 by October 10’s close, a 2.8% drop. The finance card above shows SPY’s October 10 intraday low of $652.84, reflecting tariff jitters. Historically, the S&P 500 shrugs off shutdowns, gaining 0.3% on average during 22 closures since 1976 and 13% in the year after, per Carson Group. The 2019 shutdown saw a 10% rally during its 35 days. But 2025’s mix—tariffs, no jobs report, and stretched valuations (SPY’s year-high $673.95)—makes this dip the worst since 1990’s 3% slide.Earnings Test: Banks Under the Microscope
Q3 earnings kick off this week, with Wall Street giants like JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and Goldman Sachs (GS) reporting Tuesday, followed by Bank of America (BAC) and Morgan Stanley (MS) Wednesday. Analysts have raised Q3 estimates, with State Street’s Michael Arone “uncomfortably bullish” but warning of a “small margin for error” given high valuations.- JPMorgan (JPM): Expected to show loan growth but faces tariff-related trade concerns; down 1.52% recently.
- Goldman Sachs (GS): Poised for capital markets gains ($779.96 current, $805 target), but UBS flags selectivity post-rally.
- Wells Fargo (WFC): Down 2.84%, with middle-market lending in focus.