Finance Evening: Dow Jumps 500 Points as Canada's PBO Cuts 2026 Growth Forecast to 0.9%

📊 North American Markets Today

1. Dow Rises More Than 500 Points as 3M and Northrop Grumman Beat Estimates

Source: CNBC

U.S. stocks closed higher on Tuesday. The Dow Jones Industrial Average gained 529.85 points, or 1.02%, to finish at 52,495.88. The S&P 500 added 0.28% to 7,712.57, while the Nasdaq Composite slipped 0.02% to 26,424.82. 3M jumped more than 5% after reporting better-than-expected results and raising its full-year guidance, and aerospace and defense company Northrop Grumman rose more than 4% on an earnings beat.

Oil prices pulled back from earlier highs and Treasury yields declined, lifting investor sentiment. AI-related trades, however, remained under pressure. Korean AI firm Elice tumbled more than 30% in its public market debut, and the spread on CoreWeave's five-year credit default swap rose above 1,121 basis points, reflecting concern about its debt.

Jake Behan, head of capital markets at Direxion, said the market had been willing to look through higher rates for much of the year because the growth story, notably around AI, was strong enough. "Last week, we saw that relationship begin to be tested," he said. He added that guidance on ROI, data center spending and 2027 capex from hyperscalers over the coming weeks will arguably matter more than headline earnings.

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2. Netflix Posts Solid Q3 but Cuts Q4 Revenue and Ad Guidance

Source: Deadline

Netflix reported third-quarter results after the bell on Tuesday. Earnings per share came in at 87 cents, up from 59 cents a year earlier and above Wall Street expectations. Revenue rose 12% year over year to $12.87 billion, matching the Street estimate.

The company nevertheless cut its fourth-quarter revenue guidance to $13.4 billion and lowered its 2026 advertising revenue forecast to $2.7 billion from $3 billion. Netflix blamed the timing of expenses, including those tied to last month's layoff of about 1,000 workers, or 6% of total staff, as well as a "slightly slower than expected rollout of some ad product capabilities."

Shares fell in after-hours trading following the report. In its shareholder letter, Netflix said member response to its 2026 price increases was consistent with prior changes and that engagement remains healthy, but acknowledged it needs to accelerate growth in view hours. The stock is down about 40% over the past year.

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3. United Airlines Slashes 2026 Profit Outlook on Fuel Costs

Source: CNBC

United Airlines sharply cut its full-year profit forecast on Tuesday. The carrier expects fourth-quarter adjusted earnings of 50 cents to $1.50 a share, well below the $1.76 analysts polled by LSEG had expected. At the top of that range, 2026 adjusted earnings would be no more than $7.22 a share, compared with guidance of $9 to $11 issued in mid-July.

Fuel is the main pressure. United expects to pay an average of $4.80 a gallon for jet fuel in the fourth quarter, up from $3.90 in the third. Its fuel bill rose close to 62% from a year earlier to $4.84 billion in the quarter.

Demand, however, remains strong. Third-quarter revenue rose 17.4% to $17.88 billion, and net income increased 8.5% to $1.03 billion. Domestic passenger unit revenue climbed 14.5% and international unit revenue rose 17.4%, while passenger counts were up more than 2%. CEO Scott Kirby said employees met the challenge of a changing environment and that the results prove the resilience of focusing on building a brand-loyal airline.

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4. Canada's PBO Cuts 2026 Growth Forecast to 0.9%

Source: Financial Post

Canada's Parliamentary Budget Officer on Tuesday lowered its forecast for real GDP growth to 0.9% in 2026 from 1.1% projected in June, and to 1.5% in 2027 from 1.6%. U.S. tariffs and Canadian countermeasures continue to weigh on growth, the report said.

The projection assumes U.S. Section 338 tariffs remain in place. Those measures impose 50% levies on $27.6 billion worth of Canadian goods, including alcohol, dairy, autos, electronics, chemicals, plastics and sporting goods. Growth is expected to pick up in 2028 as businesses and firms adapt.

The PBO sees inflation at 2.8% at the end of 2026, easing to 2.4% by the end of 2027. It assumes the Bank of Canada holds its policy rate at 2.25% for the rest of this year before raising it to 2.75% by mid-2027. The unemployment rate is projected to rise to 6.6% by the end of 2026 and stay there into 2027, before falling to 5.9% by the end of 2031. The Bank of Canada's next rate decision is on Oct. 28.

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5. Canada's Federal Government to Table 2026 Budget on Nov. 5

Source: The Canadian Press

Finance Minister François-Philippe Champagne said Tuesday during question period in the House of Commons that the federal Liberal government will table its 2026 budget on Nov. 5. It will be the second budget under Prime Minister Mark Carney.

Champagne said the budget will "outline the next steps in our plan to build a stronger, more resilient and more affordable Canada." The fiscal plan arrives as Canada's economy faces strong headwinds from U.S. tariffs and other geopolitical forces.

The Parliamentary Budget Officer also published an updated outlook Tuesday, projecting a $63.3-billion deficit in fiscal 2026-27, down from a forecast of $71.8 billion in June, but rising to a peak of $70.2 billion the following year. The PBO expects Ottawa to balance its operating budget by 2028-29, a year later than the Liberals promised, and sees the debt-to-GDP ratio rising. Conservative MP Melissa Lantsman said in question period that public debt charges will climb from $25.3 billion in 2021-22 to $83 billion in 2030-31. "That's not money for nurses. It's not money for housing or groceries. It is interest," she said.

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6. Alberta Referendum: About 76% Vote to Stay in Canada

Source: Global News

Elections Alberta began releasing referendum results late Monday, with about 76% of Alberta voters choosing to remain in Canada. The loonie strengthened after the result, and business leaders said it should bring confidence to consumers and business owners.

Canadian Chamber of Commerce president and CEO Candace Laing said businesses, workers and communities can feel more confident, while warning that national unity can never be taken for granted. Adam Legge, president of the Business Council of Alberta, said the result provides an important foundation for the province's economy, families and workers, but the concerns that brought the referendum forward remain, and he urged the federal and provincial governments to keep working together on fairness for Alberta.

Keyli Loeppky, senior director of Alberta and interprovincial affairs at the Canadian Federation of Independent Business, said the result removes a major source of uncertainty and allows businesses to focus on growing rather than on Alberta's constitutional future. CAPP president and CEO Lisa Baiton said the industry remains focused on working with policymakers to ensure the right fiscal and regulatory conditions to attract capital, advance major projects and improve competitiveness.

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7. U.S. Pending Home Sales Fall to Record Low in September

Source: Reuters (via Yahoo Finance)

The National Association of Realtors said Tuesday that its pending home sales index fell 7.3% in September to 66.0, the lowest level since the series began in 2001. Economists polled by Reuters had expected a decline of just 0.5%.

Contracts fell in all four regions, and pending sales were down 11.3% year over year. NAR chief economist Lawrence Yun said market conditions weakened in September due to fast-rising mortgage rates.

Freddie Mac data showed the 30-year fixed rate averaged 7.40% last week, the highest in nearly three years. Borrowing costs are tracking Treasury yields as the U.S.-Israeli war with Iran fans inflation, further depressing home sales.

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8. U.S. Orders Agencies to Remove DeepSeek, China Pushes Back

Source: Fox News

The U.S. Department of Homeland Security, in a notice made public Monday, told federal civilian agencies to remove DeepSeek artificial intelligence products from their systems and barred future purchases, citing national security concerns. China responded Tuesday by accusing Washington of politicizing technology and vowing to protect the rights and interests of Chinese companies, escalating tensions in the race for AI dominance.

Also on Tuesday, China criticized new U.S. sanctions on five Chinese entities tied to an AI trade secrets case involving a former Google engineer. The State Department imposed sanctions Monday on Shanghai Zhisuan Technology, founded by former Google software engineer Linwei Ding, along with a venture capital firm that funded the company and three related entities. China's Commerce Ministry expressed "firm opposition," accusing the U.S. of hyping the so-called trade secret theft issue.

Ding was found guilty in January of stealing AI trade secrets from Google, although his conviction was partially overturned in August. Beijing rejects allegations linking China's AI development to stolen technology, saying the industry's growth stems from long-term investment, technological self-reliance and international cooperation.

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9. Attacks in Strait of Hormuz Push Up Shipping Costs as Oil Swings

Source: NBC News

Oil prices swung sharply on Tuesday. U.S. crude jumped as much as 5% before reversing course and closing down about 2% at less than $102 a barrel. International benchmark Brent traded between roughly $105 and $112.

Ship-tracking group Kpler said in a report Monday that at least 18 vessels have been attacked in the Strait of Hormuz over the past two weeks. The cost of chartering a large tanker through the strait has quadrupled since September, outweighing the supply relief from a growing number of ships moving through the waterway.

During the session, reports that the U.S. and Iran were in active negotiations to de-escalate briefly sent prices lower. An unnamed Arab diplomat later told Bloomberg News that was "wrong," and a top Iranian official said his country was not proposing anything new to the United States or its intermediaries. U.S. gasoline prices started the week at $4.28 a gallon.

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10. Walmart Launches Walmart+ and Sam's Club Plus Bundle

Source: Fox Business

Walmart announced Tuesday that it is rolling out a membership bundle that combines Walmart+ and Sam's Club Plus for $120 a year, nearly $100 less than buying the two separately. That works out to the equivalent of $10 a month.

The bundle is available only as an annual membership, with no monthly option or free trial. Walmart+ currently costs $98 a year and Sam's Club Plus $120, while Amazon Prime costs $139. Members get free delivery from Walmart and Sam's Club, access to Sam's Club locations and member-only pricing, a choice between Peacock and Paramount+, gas discounts and 2% Sam's Cash on eligible purchases.

Walmart CEO John Furner told Fox News Digital the retailer wanted to launch the combined membership ahead of the holiday season, when many households look for ways to save money and time. "It does help at a time when we do see some customers showing some signs of pressure," he said, pointing in particular to higher energy costs. U.S. consumer prices rose 3.7% year over year in September, gasoline was up more than 34% and grocery prices climbed 1.8%.

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