By Yasin Ebrahim
Investing.com – The S&P 500 climbed Wednesday, but data showing inflation remained elevated kept a lid on the upside amid fears the Federal Reserve may be forced to hike interest rates sooner than expected.
The S&P 500 rose 0.27%, the Dow Jones Industrial Average was flat, the Nasdaq Composite was up 0.6%.
The consumer price index rose 0.4% last month, above the 0.3% rise in August, and more than estimates of 0.3%. The uptick in consumer prices in September lifted the year-on-year increase in the CPI to 5.4% from 5.3% in August.
Signs that price pressures are beginning to emerge in sticker areas of the economy such as rents and owners' equivalent rents will test the Federal Reserve's ongoing narrative that inflation remains transitory.
"[P]rice pressures are shifting to the stickier components and will make the Fed's 'transitory' thesis more difficult to defend," Jefferies (NYSE:JEF) said in a note.
Financials were the biggest drag on the broader market, paced by a decline the banking stocks as JPMorgan got the third-quarter earnings season underway.
JPMorgan Chase (NYSE:JPM) reported Q3 earnings of $3.74 per share on revenue of $29.65 billion, compared with estimates of $2.92 on revenue $29.65 billion. Its shares fell more than 2%.
BlackRock (NYSE:BLK) also delivered a beat on both the top and bottom lines, sending its shares more than 3% higher.
Delta Air Lines (NYSE:DAL) swung to a profit in the third quarter, but the airline warned that higher fuel costs will hurt fourth-quarter results. It's shares fell nearly 6%.
Energy cut some losses as oil prices recovered from session lows on expectations that demand will continue to strengthen.
Russian President Vladimir Putin said it was "quite possible," that oil prices could top $100 per barrel.
Megacap tech was supported by fall in Treasury yields, but gains in the overall sector were kept in check by weakness in Apple.
Apple (NASDAQ:AAPL) fell 1% after Bloomberg reporting, citing unnamed sources, that the tech giant it likely to cut iPhone 13 production by as many as 10 million units amid the ongoing global chip shortage.
Google-parent Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB), and Amazon (NASDAQ:AMZN) were above the flatline.
Investors are expected to turn their attention to clues on monetary policy and the economy as the Fed releases the minutes of its September meeting later on Wednesday.
The minutes are likely to confirm consensus among Fed members to start the taper of bond purchases in November, and shed light on the central bank's thinking on rate hikes.