The recent rise in interest rates comes as investors brace for the upcoming earnings season, which starts later this week. J.P. Morgan Chase, Wells Fargo, Citigroup and Walgreens Boots Alliance are among the companies set to report.
Overall, analysts expect corporate earnings to have grown by about 19 percent in the third quarter, according to data from FactSet. Earnings grew by 25 percent in the first two quarters of the year.
“The nervousness surrounding higher interest rates and tariffs should be assuaged by corporate executives not only exceeding an extremely elevated bar of consensus for their bottom line projections but also leaving their forecasts for upcoming periods intact,” said Jeremy Klein, chief market strategist at FBN Securities.
However, PPG Industries, an industrial coatings manufacturer, fell more than 10 percent after updating its third-quarter guidance. The company now expects adjusted earnings per share to range between $1.41 and $1.45, well below a FactSet estimate of $1.59.
CEO Michael McGarry said the updated guidance is a result of “significant raw material and elevating logistics cost inflation, including the effects from higher epoxy resin and increasing oil prices,” adding: “These inflationary impacts increased during the quarter and, as a result, we experienced the highest level of cost inflation since the cycle began two years ago.”
The so-called core PCE price index, which is the Federal Reserve’s preferred measure of inflation, remained at 2 percent in August. Two percent is the Fed’s inflation target.
—CNBC’s Silvia Amaro contributed to this report.