Stocks were mostly lower in early trading on Wall Street Thursday as investors judged the latest round of company earnings and tried to guess how aggressively central banks will move to raise rates in order to curb inflation.

The S&P 500 was down 0.8% late in the trading day. The tech-heavy Nasdaq Composite fell roughly 0.6% and the Dow Jones Industrial Average slipped 0.3%, or 91 points.

Most big central banks in the developed world are likely to continue to raise interest rates in coming meetings, as price pressures remain tame. Inflation numbers out of the U.K. and Canada were stronger than expected this week. FRANKFURT Producer prices in Germany strengthened in September from a year earlier, lifted by higher energy prices, a report from German statistics office Destatis said on Thursday.

In the commodity markets, Brent crude oil was up 0.09% to US$92.49 a barrel and gold was 0.25% lower at US$1,625.44.

Yields elsewhere in bond marketsYields on 2 year GoSATmbx Auction 7.6 Note: 10 year figure is yield on ACT 4\\% against Australian government bond performance moved out to 4.05%. Abroad, the 2 Year US Treasury yielded 4.61%, and the 10 Year US Treasury also made significant gains to 4.23%.

The Australian dollar was buying 62.67 US cents up from 62.67 at the Xmas close. The Wall Street Journal Dollar Index, which measures the U.S. currency against 16 others, ended down 0.06% to 104.80.

Asia

Chinese shares fell, weighed down by automakers and consumer goods companies, after Beijing reported its highest number of new Covid-19 cases in four months. White goods manufacturer Midea Group declined 1.9%, dairy producer Inner Mongolia Yili Industrial Group fell 6.8% and Kweichow Moutai retreated for a second day, losing 0.3%. Electric-car battery producer CATL dropped 3.8% and BYD Co. 1.5%, after Tesla missed 3Q sales estimates. Buy chip stocks. SMIC grew 2.2 percent and Advanced Micro-Fabrication Equipment rose 16 percent as China seeks to localize its chip industry. The Shanghai Composite Index lost 0.3% to 3035.05, the Shenzhen Composite Index fell 0.5% and the ChiNext Price Index was down 1.0%.

Hong Kong’s Hang Seng Index fell 1.4% to 16280.22, the lowest closing level since October 2011, following Wall Street’s decline overnight. But losses were trimmed on the HSI following a media report that China is weighing a potential cut in the Covid-19 quarantine period for inbound travellers. Tech shares were the leading losers on the HSI. NetEase dropped 8.6 percent, Baidu 8.1 percent and Tencent 4.75 percent. The Hang Seng Tech Index fell 2.4% to 3120.83. Sands China fell 1.4% after the casino operator posted a bigger 3Q net loss. Hansoh Pharmaceutical Group, meanwhile, gained 3.0% and CK Asset Holdings advanced 2.1%.

Japanese stocks finished down on declines in electronic shares as worries about policy tightening from influential central banks linger. Hoya Corp. declined by 3.5% while Renesas Electronics fell 2.4%. Shinsei Bank, meanwhile, soared 8.2% after a report that SBI Holdings is weighing a delisting of its banking unit. The Nikkei Stock Average dropped 0.9% to 27006.96.

Europe

European shares have risen despite UK political chaos and strong trading on Wall Street. The Pan-European Stoxx 600, FTSE 100 and German DAX each rose around 0.3% and the CAC 40 added 0.7%.

British Prime Minister Liz Truss has resigned today after economic and political carnage unleashed by her tax-cutting budget. “Truss’s big political gamble has spectacularly backfired, but not until it has caused real economic carnage in the U.K.,” says Susannah Streeter, an analyst at Hargreaves Lansdown. The risk premium on UK assets will take a long time to dissipate, after the financial nervous breakdown resulting from the mini-budget.

The FTSE 100 trimmed losses and was 0.2%, or 14 points, up at 6938 after the UK Prime Minister Liz Truss resigned. Banking, property, retail, oil and mining stocks are leading the index higher while utility and drug stocks are the biggest fallers. Brent crude rises 1.7% to $93.94 a barrel. “Market reaction to Truss’s resignation has been extremely muted,” Trevor Greetham, the head of multi asset at Royal London Asset Management, writes, and it was not particularly surprising. “The markets’ dream scenario would be a swift coalescence around one candidate that was willing to embrace [Treasury chief Jeremy] Hunt’s path and the date of the Oct. 31 report from the Office for Budget Responsibility,” he said.

North America

Stocks on Wall Street fell on Thursday, as investors scrutinized the latest round of corporate earnings and how aggressively central banks will lift interest rates to tame inflation.

The S&P 500 was down 0.8% in late day trading. The tech-heavy Nasdaq Composite fell around 0.6% and the Dow Jones Industrial Average fell 0.3%, or 91 points.

Interest rates from key central banks will continue to rise at upcoming meetings amid muted signs of price pressures letting up, say major global institutions. Inflation data for the United Kingdom and Canada exceeded expectations this week. Stronger energy prices lifted Germany’s producer prices in September from a year earlier, the German statistics office Destatis said Thursday.

The Federal Reserve has already lifted interest rates five times this year and is expected to lift its benchmark federal-funds rate by another 0.75 percentage point at its meeting early next month while it works to quell an inflation rate it views as too far from acceptably low.

“Right now, everywhere you look, we continue to get upside surprises on inflation,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management. “No one really has a handle yet on where the central banks, specifically the Fed will be able to pull back.”

The ambiguity about both inflation and the path of the Fed’s monetary tightening is at the heart of what’s been pressuring markets in recent days, said Arthur Laffer Jr., president of Laffer Tengler Investments, a registered investment adviser based in Nashville, Tenn., with more than $1 billion in assets under management.

“Markets are a little stunned that the Fed has actually demonstrated that it’s going to continue on to the horizon at least through the end of the year,” Mr. Laffer said. “If these levels of inflation do not reduce and reduce in a consistent way over several months, you are not going to get a pivot anytime soon.”

Investors are also attempting to determine whether higher inflation and more restricted financial conditions will filter into earnings season. Mr. Gimber of J.P. Morgan said he was watching to see how companies were being affected by wage pressure and increased input costs and whether those costs could be passed on to consumers.

Stocks have been jumpy in recent sessions, lifted by a batch of mixed but better-than-expected earnings reports. Still, some investors think expectations for earnings are just too high in general and that a downward recalibration will come.

“There’s probably a bit more limited downside in the market even if earnings expectations come down,” Ralph Bassett, head of investments, Americas at Abrdn said. “We don’t think we’re quite at the process where estimates have troughed and valuation looks really, really compelling. We feel we will probably just see a lot of volatility over the next six months.”

Shares of Tesla fell 6.65% after the electric-car maker trimmed its full-year growth expectations. Whirlpool and Snap are scheduled to report quarterly results after the market closes.

AT&T shares rose 7.8% after the telecommunications giant raised its profit and wireless revenue outlook.

The Labor Department reported that 214,000 workers filed initial claims for unemployment benefits in the week ended Oct. 15, a decline from the previous week. Sales of existing homes, as reported by the National Association of Realtors, declined for the eighth consecutive month to 4.7 million in September, the slowest pace since May 2020.