While you were sleeping: December hike bets firm

Trader Peter Tuchman works on the floor of the New York Stock Exchange. Photo / AP

Wall Street was mixed as the latest US inflation data renewed bets the Federal Reserve might hike interest rates for a third time after all this year.

A Labour Department report showed its consumer price index increased 0.4 per cent in August, surpassing economists' expectations and following a 0.1 per cent gain in July.

"Traders are really getting worked up by the resurgence of the policy tightening theme," John Hardy, the head of foreign-exchange strategy at Saxo in Hellerup, Denmark, told Bloomberg.

The Federal Open Market Committee begins its next two-day meeting on September 19.

In 3.14pm trading in New York, the Dow Jones Industrial Average rose 0.2 per cent. However, the Nasdaq Composite Index dropped 0.4 per cent. In 2.58pm trading, the Standard & Poor's 500 Index slipped 0.1 per cent.

Earlier in the day, the Dow climbed to a record 22,212.11, while the S&P 500 reached a record high 2,498.43.

The Dow rose as gains in shares of United Technologies and those of Pfizer, recently up 2.1 per cent and 1.9 per cent respectively, outweighed slides in shares of Travelers and those of Walt Disney, recently down 1.7 per cent and 1 per cent respectively.

In Europe the Stoxx 600 Index ended the session with a gain of 0.1 per cent from the previous close. France's CAC 40 Index added 0.2 per cent.

Germany's DAX Index fell 0.1 per cent.

The UK's FTSE 100 Index dropped 1.1 per cent after Bank of England policy makers flagged they are getting ready to hike interest rates over the coming months.

"A majority of [Monetary Policy Committee] members judge that, if the economy continues to follow a path consistent with the prospect of a continued erosion of slack and a gradual rise in underlying inflationary pressure then, with the further lessening in the trade-off that this would imply, some withdrawal of monetary stimulus is likely to be appropriate over the coming months in order to return inflation sustainably to target," the central bank said in a statement at the end of a policy meeting.

The British pound rose while gilts fell.

"The minutes struck a considerably more hawkish tone," Paul Hollingsworth, an economist at Capital Economics, told Bloomberg. "If the economy continues to hold up, and there are clearer signs that wage growth is building, then the first hike could come somewhat earlier than we had previously envisaged."

Shares of Switzerland's Nestle closed 0.1 per cent weaker in Zurich. The world's largest coffee producer said it agreed to acquire a majority stake in Oakland, California-based Blue Bottle Coffee, a high-end speciality coffee roaster and retailer with shops in major US cities and Japan.

"This move underlines Nestle's focus on investing in high-growth categories and acting on consumer trends," Nestle CEO Mark Schneider said in a statement. Blue Bottle Coffee's "path to scale is clearly defined and benefits from increasing consumer appreciation for delicious and sustainable coffee."

The total number of Blue Bottle Coffee shops is expected to reach 55 by the end of 2017, up from 29 at the end of last year. Blue Bottle Coffee will continue to operate as a stand-alone entity, and current management and employees will retain a minority stake, Nestle said.