Stock market news live updates: Stock futures rise as investors eye bank earnings, inflation data

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Stock futures gained on Wednesday as investors digested new earnings data and awaited a key inflation report, which will help show the extent to which rising prices have weighed on the economic recovery and corporate profits. 

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Third-quarter earnings season picked up, with notable companies including JPMorgan Chase (JPM) and BlackRock (BLK) posting results before market open. JPMorgan Chase, the largest U.S. bank by assets, posted results that topped estimates on both the top and bottom lines, boosted by a larger-than-expected release of credit reserves and strong sales in the firm’s investment banking and equities trading divisions.

Investors have been trimming their outlooks for overall S&P 500 earnings growth for the third quarter, given that rising input prices, higher labor costs and other supply-side headwinds likely weighed on margins and chipped away at profitability. 

Recent developments for a plethora of companies across industries have already reflected the impacts of supply chain shortages and shipping challenges. The Wall Street Journal reported that firms from Costco (COST) to Walmart (WMT) have resorted to chartering their own ships to import goods ahead of the holiday season. And Bloomberg reported Tuesday that Apple (AAPL) was set to cut its iPhone production targets for this year by as many as 10 million units due to ongoing chip shortages. 

The latest batch of economic data due Wednesday is likely to confirm that these supply and demand mismatches translated to ongoing inflationary pressures at the start of the fall. In the Labor Department’s Consumer Price Index, core prices, excluding food and energy, rose by 4.0% in September over last year, coming down only slightly from June’s 30-year high of 4.5%. And a broader measure of consumer prices including all categories rose 5.4% in September compared to last year, coming in at the fastest pace since 2008.

Wall Street analysts are looking for third-quarter earnings growth of about 27% on a year-over-year basis, according to FactSet data. Though this would still be the third-fastest earnings growth rate since 2010, it would be a marked slowdown from the second quarter’s nearly 90% pace. 

Savita Subramanian, Bank of America’s head of U.S. equity and quantitative strategy, wrote in a note this week that this “will be a make-or-break quarter with all eyes on margins and supply chains. 

Other strategists agreed. 

“We think investors should fasten their seatbelts because this is going to be one rocky earnings season,” Wall Street Alliance Group’s Aadil Zaman told Yahoo Finance Live on Tuesday. “Supply chain issues are going to be dominating the earnings, and some companies, we are going to see, are going to give us an early Halloween shock.”

However, given that issues around materials shortages, port congestion and labor scarcities have already been well-known among investors, traders should focus more closely on company commentary and outlooks as a signal of future resilience, some pundits noted.  

“The message that I’m giving to our investors is focus not necessarily on what the third-quarter print is, but more importantly focus on what companies are saying about visibility going forward,” John Lynch, chief investment officer for Comerica Wealth Management, told Yahoo Finance Live. “And we think that we’re going to see good visibility from some of the value and cyclical players going forward.”

8:30 a.m. ET: Consumer prices rose more than expected in September as energy prices advanced for a fourth straight month

Consumer prices posted a faster-than-expected rise in September compared to August and the same month last year, with a broad jump in food, housing and energy prices contributing to the gain.

The Bureau of Labor Statistics’ Consumer Price Index (CPI) increased at a 0.4% monthly rate in September, accelerating from August’s 0.3% pace. On a year-over-year basis, the CPI jumped 5.4%, also speeding compared to the prior month’s 5.3% increase and coming in at the fastest pace since 2008. Consensus economists were looking for the CPI to increase by 0.3% and 5.3% on a month-over-month and annual basis, respectively.

Price increases across food and shelter contributed to more than half of the monthly increase in CPI, the BLS said in its report. Grocery store food prices increased for an array of products including meats, nonalcoholic beverages, fruits, vegetables and bakery goods. The energy index also increased 1.3% in a fourth straight monthly gain, led in turn by a 3.9% monthly surge in fuel oil prices.

Excluding the more volatile food and energy categories, the CPI still rose 0.2% on a month-over-month basis, coming in a tick faster than August’s 0.1% increase. Over last year, the CPI excluding food and energy prices increased by 4.0%, matching August’s rate. Though this metric has slowed from June’s 30-year high of 4.5%, it remains elevated on a historical basis. 

7:30 a.m. ET: Stock futures point to a higher open

Here’s where markets were trading Wednesday morning: 

  • S&P 500 futures (ES=F): +7 points (+0.16%), to 4,347.75

  • Dow futures (YM=F): +42 points (+0.12%), to 34,302.00

  • Nasdaq futures (NQ=F): +52.75 points (+0.36%) to 14,706.66

  • Crude (CL=F): -$0.36 (-0.45%) to $80.28 a barrel

  • Gold (GC=F): +$12.90 (+0.73%) to $1,772.20 per ounce

  • 10-year Treasury (^TNX): -1 bp to yield 1.57%

7:18 a.m. ET Wednesday: JPMorgan Chase beats 3Q results top expectations, kicking off bank earnings on a high note

JPMorgan Chase handily exceeded Wall Street’s expectations for third-quarter earnings and revenues, with the results boosted a leap in investment banking activity. 

Investment banking revenue surged 45% over last year to $3 billion, with both advisory and equity underwriting fees increasing. Elsewhere in the firm, equity sales and trading revenue grew 30% to reach a better-than-expected $2.60 billion. This growth helped offset a 20% drop in fixed-income sales and trading revenue, though this still came about in-line with estimates at $3.7 billion.

JPMorgan’s quarterly earnings also received a positive impact from the release of $2.1 billion in net credit reserves, which had been set aside earlier on during the pandemic to protect against potential loan defaults and nonpayments. 

In a statement, JPMorgan Chase CEO Jamie Dimon said the reserve release came “as the economic outlook continues to improve and our scenarios have improved accordingly. As we have said before, however, we do not consider these scenario-driven releases core or recurring profits.” 

6:10 p.m. ET Tuesday: Stock futures edge lower

Here’s where markets were trading Tuesday evening:

  • S&P 500 futures (ES=F): -11 points (-0.25%), to 4,329.75

  • Dow futures (YM=F): -51 points (-0.15%), to 34,209.00

  • Nasdaq futures (NQ=F): -54.5 points (-0.37%) to 14,595.75

© Provided by Yahoo! Finance NEW YORK, NEW YORK – SEPTEMBER 30: Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City. In afternoon trading the Dow was down over 250 points as investors continue to worry about inflation, wages and supply chain issues. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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