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S&P 500 Hits Record High; Pfizer Gains On Vaccine Sales Beat, Tesla Slips As Musk Casts Doubt on Hertz Deal

Wall Street looks headed for a cautious start to the Tuesday session, following another set of record highs last night, as investors look to the start of the Federal Reserve's two-day policy meeting in Washington.

U.S. stocks extended gains Tuesday, with the S&P 500 rising to yet another all-time high, as investors look to the start of today's Federal Reserve policy meeting while sifting through the latest batch of third quarter earnings reports.

The Fed is widely expected to detail how it will begin slowing the pace of it $120 billion in monthly bond purchases - the first of several steps required for a true rate hike, which some analysts now suggest could come as early as July of next year.

Supply chain disruptions could still derail the now-uneven global recovery, however, and while Fed officials are mindful of the searing pace of inflation -- its preferred gauge held near the highest levels since the early 90s last month -- they are also worried that tightening policy too early could tip economy into a sharper slowdown.

Still, global central banks certainly seem to be more comfortable with tactics that would slow inflation than they are concerned about blunting recovery prospects, as evidenced by the Reserve Bank of Australia's move to drop target rates for bond yields while hinting at rate hikes in 2023 following a policy meeting today in Sydney. 

In the meantime, corporate earnings continue to pour in, with updates from Pfizer  (PFE) - Get Pfizer Inc. Report, Estee Lauder  (EL) - Get Estee Lauder Companies Inc. Class A Report, DuPont  (DD) - Get DuPont de Nemours, Inc. Report and Under Armour  (UAA) - Get Under Armour, Inc. Class A Report arriving prior to the start of trading.

With just over half of the S&P 500 reporting so far this earnings season, collective profits are expected to rise 39.2% from last year to $444.3 billion. In fact, more than 82% of the 279 S&P 500 companies reporting have topped Street forecasts, according to Refinitiv data, a beat rate that is well above the long-term average of 65.8%. 

The Dow Jones Industrial Average bumped 29 points higher in the opening hour of trading, while the S&P 500 gained 11 points to trade at a fresh all-time high of 4,627.33 points. The tech-focused Nasdaq Composite, meanwhile, gained 35 points from last night's close as benchmark 10-year note yields fall to 1.556%.

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DuPont shares were a notable pre-market mover, rising 4.6% to $74.50 each after the industrials group unveiled a $5.2 billion takeover of engineering materials maker Rogers Corp  (ROG) - Get Rogers Corporation Report and lowered its full-year profit forecast thanks in part to supply chain disruptions and semiconductor shortages.

Apple  (AAPL) - Get Apple Inc. (AAPL) Report, as well, was reportedly hit by chip woes, with shares up 0.8%% to $150.24 each, as Japan's Nikkei reported that the tech giant is cutting back on iPad production in order to direct scarce semiconductor supplies to its flagship iPhone.

The paper said iPad production runs are about half of their normal pace, owing to Apple's decision to prioritize chips for its new iPhone 13, which it expects to generate stronger demand over the holiday season. 

Pfizer jumped 2.52% to $44.75 each after stronger-than-expected third quarter earnings that included both a full-year profit guidance boost and a forecast of $36 billion for sales of its COVID vaccine.

Tesla  (TSLA) - Get Tesla Inc Report, meanwhile,  fell 0.8% after founder and CEO Elon Musk poured cold water on reports of a $4.4 billion EV sales to Hertz Global . The group also said it is recalling nearly 12,000 vehicles due to a software communications error issue that can trigger false forward collision warnings.

In other markets, European stocks peeled away from all-time highs in cautious trading ahead of the Fed rate decision on Wednesday, with PMI data showing factory activity in October easing to an eight-month low amid supply chain disruptions and surging input costs. 

BP Plc  (BP) - Get BP p.l.c. Sponsored ADR Report shares were unable to move higher as a result, even as the region's second-largest oil major posted better-than-expected third quarter earnings and boosted its share buyback plans by $1.25 billion.

BP's U.S.-listed shares were marked 2.8% lower in pre-market trading, while Europe's Stoxx 600 slipped 0.05% lower heading into early afternoon trading.