Stocks closed higher yesterday with all of the major indexes in the green. The small-cap Russell 2000 led the way with an outsized gain of 1.72%.

Before the open, McDonald's reported a negative EPS surprise of -3.88%, and a positive sales surprise of 0.15%. That translated to a quarterly EPS growth rate of -0.31% vs. this time last year, and a sales growth of 3.06%. While management cited a "challenging environment," they expect same store sales growth to accelerate in Q4. They were up 2.16% in the regular session following earnings.

After the close, AppLovin posted a positive EPS surprise of 3.38%, and a positive sales surprise of 4.11%. That equated to a quarterly EPS growth rate of 96.0%, and a sales growth of 17.5%. They also raised Q4 sales guidance by 2.58% above the consensus. They were up 1.38% in the regular session, and climbed by more than 3.50% in after-hours trade.

DoorDash reported after the bell as well, and posted a negative EPS surprise of -19.1%, and a positive sales surprise of 2.41%. Despite the negative EPS surprise, their quarterly EPS growth rate was up 44.7%, with a sales growth of 27.3%. They noted, however, that they will be spending more on product development in the coming year. Shares were off -0.80% in the regular session, but fell by more than -18% in after-hours.

We also heard from ARM Holdings, which posted a positive EPS surprise of 18.2%, and a positive sales surprise 6.47%, for a quarterly sales growth of 34%. They raised their quarterly sales guidance by 11.8% above the consensus. They were off -0.34% in the regular session before earnings, but were higher by more than 3% in after-hours trade following earnings.

Today we'll hear from another 652 companies, including ConocoPhillips before the open, and Airbnb and Datadog after the close.

In other news, the Supreme Court heard arguments yesterday concerning tariffs, and the President's authority to use emergency powers to implement them without congressional approval. In Trump v. V.O.S. Selections, Inc., a private business sued the administration over the use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs. Plenty of headlines came out on how it went, as well as speculation on what the judges thought. But guesswork aside, all that matters is what the Supreme Court says when they make their ruling. Given the expedited nature of the case, a decision could come as early as December and is expected by year's end.

On the economic report front yesterday, MBA Mortgage Application showed the Composite Index down -1.9% w/w, with purchases off -0.6% and refi's off by -2.8%.

The PMI Composite Index came in at 54.6, beating last month's 53.9, but just missing estimates for 54.8. The Services Index rose to 54.8 vs. last month's 54.2, but came in under views for 55.2.

The ISM Services Index improved to 52.4 vs. last month's 50.0 and forecasts for 51.0.

The ADP Employment report came in better-than-expected with 42,000 new private payroll jobs being created last month vs. the consensus for -29,000.

Today we'll get the Wholesale Inventories Report, Weekly Jobless Claims, and the Challenger Job-Cut Report.

The shutdown set a new record yesterday (36 days -- surpassing the previous record of 35 days back in 2018/2019).

There is hope that both parties can soon find an offramp to open the government back up.

In the meantime, earnings season continues. And, so far, it's shaping up to be another better-than-expected earnings showing. And that bodes well for stocks.

See you tomorrow,