Wall Street and European equities rose higher on Wednesday as investors considered mixed reports on how large businesses are handling inflationary pressures.
The S&P 500 rose 0.4 percent, gaining for the sixth day in a row, marking the longest run of daily growth since the end of June.
The blue-chip index traded just below its all-time closing high in early September, despite trading a few weeks before the start of the earnings season.
The technology-centric Nasdaq composite gyrated, leaving the morning gains and the day ended a little lower. In Europe, the regional Stoxx 600 index closed up 0.3 percent, its profit in October so far above 3 percent, thanks to optimism about the quarterly earnings season.
The move comes after consumer group Nestle lifted its full-year earnings guidelines to raise commodity prices in response to rising input costs. Belvedere Procter & Gamble, a consumer goods company, also said on Tuesday that it would raise prices and maintain its full-year earnings outlook.
Dutch paintmaker Akzo Nobel reported weaker-than-expected quarterly results on Wednesday, however, citing raw material inflation and disruption in the supply chain. Headline consumer inflation in the United States has surpassed 5 percent in four months and reached a 29-year high in Germany.
“At the moment, the equity market seems to have enough earnings power to offset our macroeconomic headwind,” said Marija Whitman, a senior strategist at State Street. “But while some companies have shown that they are now able to afford higher costs to consumers and maintain margins, it is too early to say whether this will be a long-term trend.”
The benchmark U.S. Treasury note yield, which runs against its value, rose 0.01 percentage points to 1.64 percent, the highest point since May.
Half of the Federal Reserve’s policymakers expect US interest rates to rise from their current record lows next year, but the world’s most influential central bank still describes inflationary pressures as transient.
“Markets agree with the central banks that inflation is temporary and will not last until 2023. Only when it changes will the central banks have expectations. [and their monetary policy] Move materially. “
In Asia, Hong Kong’s Hang Seng Index rose 1.4 percent, while Tokyo’s Topics Day ended roughly where it started.
On the currency, the sterling strengthened 0.2 percent against the dollar to 3 1.38, and annual UK consumer price inflation fell slightly to 3.1 percent in September after data showed. The UK currency jumped 0.5 per cent against its U.S. counterpart on Tuesday as traders bet on raising the Bank of England interest rate.
“The Bank of England will need to raise interest rates in December and possibly keep inflation in check in February,” Libram strategists Joachim Clement and Susanna Cruz said in a note to clients after the release of inflation data. “.
The dollar index, which measures the U.S. currency against six others, weakened in the afternoon trade, down 0.2 percent.
Brent crude, the oil benchmark, rose 0.9 percent to settle at .8 85.82.
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