Global equities mostly declined Wednesday after U.S. benchmarks reached record levels Tuesday, driven by optimism over corporate earnings. The S&P 500 index climbed 0.6% on Tuesday to a record close of 7,818.93, surpassing its previous all-time high set in August. The index has risen 23% since hitting a trough in late March, despite ongoing concerns regarding the war with Iran, high inflation, and bond market pressures.
The Dow Jones Industrial Average added 0.5% to 51,521.28, while the Nasdaq composite gained 0.4% to close at its own all-time high of 27,599.79. Ng Jing Wen of Mizuho Bank noted that the rally reflects confidence that corporate earnings, particularly in technology and AI-related sectors, can withstand elevated energy costs and restrictive interest rates. She added that this resilience suggests investors are prioritizing earnings momentum over near-term inflation risks.
In early European trading on Wednesday, the CAC 40 in Paris lost 0.6% to 7,818.69, and Britain's FTSE 100 shed 0.4% to 10,501.41. Germany's DAX fell 0.8% to 25,237.82. Asian markets also slipped, with the Nikkei 225 in Tokyo down 0.9% to 70,035.71 and South Korea's Kospi dropping 2% to 6,803.90. Hong Kong's Hang Seng index fell 0.5% to 24,160.25, while Taiwan's Taiex was nearly unchanged. Markets in Shanghai remained closed for a national holiday.
In Australia, the S&P/ASX 200 erased early gains to close 0.2% lower at 8,727.70.
Strong corporate results continue to support the market. Lamb Weston reported that its profit and revenue for the latest quarter exceeded projections and analysts' expectations, prompting a 7.5% rally in its stock. Constellation Energy also helped lead market gains after announcing a long-term deal to provide electricity to Google.
Analysts expect S&P 500 companies to deliver nearly 30% growth in earnings per share for the July through September quarter, according to FactSet data. If realized, this would mark the third straight quarter of growth exceeding 25%. Delta Air Lines is scheduled to report third-quarter results on Friday, with several major banks reporting next week.
Bond yields offered some relief on Tuesday after falling from their highest levels in years or decades. The yield on the 10-year Treasury eased to 5.28% from 5.31% late Monday following a stabilization in oil prices.
However, crude prices rebounded early Wednesday. Brent crude oil rose 0.7% to $101.41 per barrel, remaining below the nearly $110 level seen a few weeks ago. U.S. benchmark crude rose 0.7% to $90.11 per barrel.
Currency movements also shifted slightly early Wednesday, with the U.S. dollar rising to 158.33 Japanese yen from 158.10 yen, while the euro slipped to $1.1228 from $1.1260.