Nature abhors a vacuum and markets aren't all that keen on it either. The absence of economic data until the end of the week is likely to make investors jumpy about earnings.

Stocks have rallied from the brief tumbles caused by trade-war threats and bad banking loans but the trend is toward seeking havens. Gold keeps hitting new highs, bond prices are rising, and utilities and healthcare stocks are leading the S&P 500 this month. This is a market that doesn't want any surprises as earnings season gets into full swing.

Expect plenty of attention on Coca-Cola and Netflix reports for the health of the consumer -- financially, at least. Meanwhile Intel and Tesla will give clues about the next stage of the artificial-intelligence trade and whether it is ready to broaden out into other chip makers and robotics applications.

One potential hazard that will need navigating is regional bank earnings. Zions Bancorp and Western Alliance report early in the week and investors will want reassurance that their already-disclosed bad loans are the end of the matter. Other financial stocks will also be under scrutiny for any more of the "cockroaches" JPMorgan chief Jamie Dimon warned of last week.

After all that, it might be a relief to get some official economic numbers -- the Bureau for Labor Statistics has called back employees to produce inflation data for September, expected on Friday. While an October interest-rate cut from the Federal Reserve is fully priced in, the debate will center on what it means for potential further easing in December.

If stocks get through earnings unscathed and there's a benign inflation report to round things off, it should be the signal for the bull market to head higher. But strange things can happen in a vacuum and right now the prevailing theme is caution.

-- Adam Clark

***Join Barron's senior managing editors Lauren Rublin and Ben Levisohn today at noon when they discuss what's behind gold's latest move with Aakash Doshi, global head of gold strategy for the SPDR ETF business at State Street. We'll also examine the silver market, and bring listeners up-to-date on noteworthy companies reporting earnings during the week. Sign up here.

***

The Fed Heads Into October Meeting With Less Clarity Than Usual

The Federal Reserve is preparing for its next policy meeting with less clarity than usual because the shutdown halted or delayed the release of key data, leaving officials to make their next interest rate decision with only a partial view of the economy. It's expected to use caution: a quarter-percentage-point cut.

   -- This week, 80 S&P 500 companies report earnings, diversifying the 
      schedule beyond last week's financial services-heavy calendar. Netflix 
      and General Motors report on Tuesday, while IBM and AT&T are among 
      Wednesday's reports. Consumer product giant Procter & Gamble follows up 
      on Friday. 
 
   -- Also on Friday, the Bureau of Labor Statistics releases the delayed 
      report on the consumer price index for September. Economists expect an 
      annual rise of 3.1%, two-tenths of a percentage point more than in 
      August. And core prices are also expected to rise 3.1%. 
 
   -- Despite the continuing government shutdown, some BLS employees were 
      recalled to work to collect data for this inflation report so the Social 
      Security Administration could set its annual cost-of-living adjustment. 
 
   -- S&P Global releases both its Manufacturing and Services Purchasing 
      Managers' Indexes for October later this week, too. Consensus estimates 
      are for a 51.7 reading for the Manufacturing PMI and a 53.5 for the 
      Services PMI. This compares with readings of 52 and 54.2, respectively, 
      in September. 

What's Next: Citigroup analysts expect the shutdown could extend into November, compressing three months of jobs data into a burst of releases later this year. Those numbers will be critical in determining whether the Fed will keep cutting into 2026. For now, October's meeting looks like a holding pattern.

-- Nicole Goodkind and Dan Lam

***

Tesla's Shareholders Told to Reject CEO Musk's $1 Trillion Pay

The drama over a proposed $1 trillion pay package for Tesla CEO Elon Musk is heating up the same week it reports third-quarter earnings. The proxy advisor Institutional Shareholder Services recommended against the pay plan, citing its "astronomical" size, though Musk would need to hit shareholder targets to qualify.

   -- ISS also recommended against a large pay award in 2018, but shareholders 
      approved it twice, including after a Delaware judge voided the proposed 
      plan. Tesla responded to ISS' latest recommendation on Musk-owned X, 
      saying the advice "completely misses fundamental points of investing and 
      governance." 
 
   -- The 2025 award would grant some 425 million incentive-laden options. 
      Incentives include delivering 20 million EVs cumulatively, achieving 10 
      million active subscriptions for Tesla's highest-level Full Self-Driving 
      technology, and delivering one million Optimus humanoid robots, among 
      other things. 
 
   -- The options will vest if Tesla achieves an $8.5 trillion market value. 
      Wedbush analyst Dan Ives and Future Fund Active ETF co-founder Gary Black 
      believe there is no chance that Tesla shareholders will vote it down. 
 
   -- Tesla investors have lately been more focused on the EV maker's robo-taxi 
      platform, which is in the rollout stage amid competition from Google's 
      Waymo and other robo-taxi offerings. Tesla could talk about robo-taxis 
      and its new low-cost vehicles on its earnings call. 

What's Next: The shareholder vote outcome won't come until Tesla's annual meeting on Nov. 6, but it reports third-quarter earnings on Wednesday. Wall Street expects earnings of 55 cents a share. Tesla sold a quarterly record 497,099 cars in the quarter, before the EV tax credit expired Sept. 30.

-- Al Root and Janet H. Cho

***

Soaring Electricity Prices Offer Potential Investing Opportunities

Rising electricity prices, or "pain at the plug," are a warning sign for regulators and a potential buying opportunity for investors. Whereas gasoline prices have long been a barometer of economic health and political stability, electricity bills are assuming, or about to assume, that role.

   -- The average electricity price in U.S. cities is roughly 19 cents a 
      kilowatt-hour, up 43% since the end of 2019, and 18 percentage points 
      greater than the jump in overall consumer prices. Power-hungry artificial 
      intelligence data centers are partly to blame for driving up prices. 
 
   -- William Blair analyst Jed Dorsheimer expects electricity rates to be a 
      hotly debated issue in next year's midterm elections and at utility 
      resource planning meetings as electricity prices pit AI against 
      constituents. Dorsheimer sees opportunities in nuclear fusion, geothermal 
      power, and new nuclear technologies. 
 
   -- Virginia's Dominion Energy is developing a grid-scale fusion power plant 
      with Commonwealth Fusion Systems, for example. Grid development done 
      right means more manageable electricity prices for households and 
      businesses. And ample low-cost power means more economic growth. 
 
   -- Constellation Energy, with 21 nuclear reactors across several states, 
      plus wind farms and hydroelectric plants, is acquiring Calpine, one of 
      the biggest U.S. operators of natural-gas plants. When that deal closes, 
      Constellation will produce more electricity than any company on Earth. 

What's Next: Constellation CEO Joe Dominguez, credited with convincing the Trump administration on nuclear power benefits, has signed deals with both Meta Platforms and Microsoft to buy power from Constellation's reactors for their AI data centers. Constellation's $26.6 billion purchase of Calpine is on track to close within weeks.

-- Al Root, Avi Salzman, and Janet H. Cho

***

Growing Nimby Movement Could Upend AI Data Center Plans

Artificial intelligence spending may be transforming the U.S. economy, but a lot of Americans don't want the giant data centers at the center of the booming industry located anywhere near them. Communities are worried about how the giant warehouses will affect everyday life, including electricity and water consumption.

   -- Local rebellions have sunk or delayed tens of billions of dollars of 
      potential data center projects, says Tyson Slocum, director of the energy 
      program at consumer advocacy nonprofit Public Citizen. Last month, 
      Alphabet's Google backed out of a planned 468-acre data center in 
      Indianapolis before citizens could vote against it. 
 
   -- Google said afterward that while it's disappointed the project won't move 
      ahead it continues to look for opportunities in the state. In Virginia, 
      home to more data centers than anywhere else, at least 42 groups have 
      sprung up to oppose more data centers in their towns, according to Data 
      Center Watch. 
 
   -- Data Center Watch, a research firm backed by AI security company 10a Labs, 
      has found that $64 billion of data center projects in 28 states had been 
      delayed or blocked between May 2024 and March 2025 because of community 
      opposition. Since then, several more projects have hit speed bumps. 
 
   -- Data center water use for cooling the servers and other purposes is a 
      large concern. In 2023, data centers used 17 billion gallons of water for 
      cooling, according to Jefferies research. But they also used 211 billion 
      gallons indirectly for power generation, the research found. 

What's Next: Data centers can stimulate economies but lead to fewer jobs per dollar invested than other development. A $7.3 billion Microsoft data center project in Wisconsin is expected to create 800 permanent jobs, but a $7.6 billion Hyundai plant in Georgia is expected to lead to 8,500 jobs.

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October 20, 2025 07:07 ET (11:07 GMT)

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