Market Pauses: Investors Brace for Earnings Season Amid Economic Uncertainty

U.S. stocks declined as investors prepared for third-quarter earnings without new economic data or significant market catalysts. The S&P 500 and Nasdaq retreated from record highs, and the Dow fell due to ongoing government uncertainty and Fed policy ambiguity. Analysts expect lower earnings growth this quarter.

U.S. stocks dipped on Thursday as investors took a cautious approach, preparing for the upcoming third-quarter earnings season amid a void of fresh economic data or impactful market catalysts. The S&P 500 and Nasdaq mildly retreated from Wednesday's historic highs, while the Dow experienced a more significant decline.

Matthew Keator of Keator Group highlighted concerns about market consistency in earnings growth compared to previous quarters. The anticipation of potential interest rate cuts by the Federal Reserve adds to the air of uncertainty, exacerbated by the U.S. government shutdown now in its ninth day, leaving investors without essential economic updates.

As the third-quarter earnings season looms, key players like JPMorgan and Goldman Sachs are set to release their results next week. Analysts predict a slowdown in earnings growth to 8.8%, a dip from 13.8% last quarter. In contrast, Delta Air Lines and Costco both reported strong performances, witnessing an upsurge in their respective share prices.

(With inputs from agencies.)