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Stock Market Live: Dow, S&P, Nasdaq Hit Record Highs As Earnings Impress Ahead Fed Rate Decision

U.S. stocks, fresh off their best monthly gain since November of last year, notched another triple-set of record highs as earnings continue to power optimism ahead of Wednesday's Fed rate decision.

U.S. stocks notched a triple-set of record highs Monday, following on from the best monthly gain for the S&P 500 in nearly a year, as earnings optimism continues to offset concern over a near-term move on tapering from the Federal Reserve that could add to signals of slowing growth in the supply chain-snarled economy.

Stocks pared some of those gains by mid-morning, however, following data that showed a modestly slowing of manufacturing sector activity over the month of October, even though the reading still indicated a healthy expansion despite the myriad supply chain hurdles. 

More than 82% of the 279 S&P 500 companies that have reported so far through this third quarter earnings season have topped Street forecasts, according to Refinitiv data, a beat rate that is well above the long-term average of 65.8% and puts the benchmark on pace to see collective profits rise 39.2% from last year to $444.3 billion.

That momentum has, for the moment at least, snuffed out concerns for both faster inflation and slowing growth, both of which were in evidence last week when the Fed's preferred inflation gauge held near the highest levels since the early 90s over the month of September.

Wages are also surging, with third quarter employment costs rising at the fastest pace in 39 years, according to the Labor Department's Employment Cost Index.

Fed officials will kick-off their two-day policy meeting Tuesday, with analysts looking for a formal start to the tapering process -- i.e. a slowing of the pace of monthly bond purchases that have been holding down market interest rates since the peak of the pandemic -- the following day.

"Respectable arguments can still be made that the surge in inflation in both prices and wages will not persist indefinitely, but the danger is that the Fed could be pushed into taking action as insurance against these arguments being wrong," said Ian Shepherdson of Pantheon Macroeconomics.

Nonetheless, Wall Street started the week with another set of all-time highs, with the Dow Jones Industrial Average adding 20 points by late-morning trading while the S&P 500 slipped 6 points following an October advance of 6.9%, the best since November of 2020.

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The tech-focused Nasdaq Composite bumped 15 points higher from Friday's record close  -- the 38th of the year -- as benchmark 10-year note yields hold at 1.582% in early New York trading.

Harley-Davidson  (HOG) - Get Harley-Davidson, Inc. (HOG) Report shares were a early mover, surging 9.8% after the U.S. and the European Union reached an agreement on steel and aluminum imports that allowed for the cancellation of tariffs on the iconic motorcycle maker's products.

On Semiconductor Corp.  (ON) - Get ON Semiconductor Corporation Report shares surged 13.3% to a record high after the chipmaker and Apple  (AAPL) - Get Apple Inc. (AAPL) Report supplier posted stronger-than-expected third quarter earnings and forecast solid holiday-season revenues. 

Roblox  (RBLX) - Get Roblox Report shares were also on the move after, slipping 1.8% after the online gaming 'metaverse' platform restored services Sunday following a major outage that kept its games popular with kids offline for three straight days.

Coca-Cola  (KO) - Get Coca-Cola Company Report shares also edged lower following its deal to pay $5.6 billion for full control of sports drink maker BodyArmor.

The Wall Street Journal had reported Sunday that Coca-Cola, which already owns a 30% stake in the Beverely Hills, California-based group, will buy the remaining stake for $5.6 billion as it seeks to expand its offering of low sugar and non-carbonated beverages. 

In overseas markets, earnings momentum and a still-dovish stance from the European Central Bank helped the region-wide Stoxx 600 rise to a fresh record high of 479.62 points Monday, although gains were tempered somewhat by a 1.5% fall for Barclays BCS after CEO Jes Staley was asked to resign following a probe into his relationship with disgraced financier Jeffery Epstein. 

Overnight in Asia, official data from China showing a contraction in the nation's manufacturing sector -- linked to its ongoing power crisis -- in the month of October kept regional stocks in the red for most of the session, with the MSCI ex-Japan index falling 0.27%.

Japan's Nikkei 225, however, surged 2.6% to close at 29,647.08 points following a surprise win for Prime Minister Fumio Kishida's LDP Party in Sunday's parliamentary elections that allowed it to hold a narrow one-seat majority in the lawmaking lower house.