U.S. equities inched higher on Tuesday as investors processed fresh inflation data and a wave of bank earnings that kicked off the second-quarter reporting season.
As of 09:35 ET, the Dow Jones Industrial Average rose 25 points, or 0.1%, the S&P 500 gained 25 points, or 0.4%, and the NASDAQ Composite advanced 165 points, or 0.8%.
Inflation Data Sends Mixed Signals
June’s Consumer Price Index (CPI) showed annual inflation rising faster than expected, climbing 2.7% year-over-year, ahead of the 2.6% forecast and up from 2.4% in May. On a monthly basis, CPI rose 0.3%, in line with estimates and up from May’s 0.1% increase.
However, the underlying inflation picture was more encouraging. Core CPI, which excludes volatile food and energy prices, rose 2.9% year-over-year—slightly below the 3.0% consensus—and just 0.2% month-over-month, also under expectations.
“The impact of tariffs remains muted for now, with companies drawing on pre-tariff inventories and absorbing some costs,” analysts at CIBC Economics noted. “But as inventories shrink, we anticipate more visible passthrough, which could keep the Fed cautious on rate cuts.”
The Federal Reserve has previously flagged that persistent inflation pressures—exacerbated by tariff policies—may delay any decision to ease interest rates.
Bank Earnings Set the Tone
Financial stocks were in focus as major U.S. banks reported earnings, offering a glimpse into how the sector is navigating a complex macroeconomic and geopolitical environment.
JPMorgan Chase (NYSE: JPM) edged higher after reporting strong trading revenue, as market volatility driven by tariff policy shifts created opportunities. However, overall quarterly profit declined due to a tough comparison with the prior year’s one-time gain.
Wells Fargo (NYSE: WFC) slipped after the bank lowered its forecast for full-year net interest income. Meanwhile, BlackRock (NYSE: BLK) also fell, despite reporting record assets under management of $12.53 trillion.
Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS) are set to report results on Wednesday.
Investors are also eyeing upcoming earnings from a range of major companies including Microsoft, Johnson & Johnson, United Airlines, Netflix, American Express, and 3M.
Nvidia in Focus Amid China Developments
Nvidia (NASDAQ: NVDA) attracted attention after announcing it will resume sales of its H20 AI chip in China and launch a new GPU tailored to the Chinese market. The move follows CEO Jensen Huang’s visit to China and recent signs of easing U.S.-China tech tensions, including the lifting of certain export restrictions by Washington.
Oil Prices Dip
Crude prices edged lower, extending Monday’s losses after President Trump issued a 50-day ultimatum for Russia to end the war in Ukraine or face sanctions—signaling a less aggressive stance that helped ease immediate concerns over global supply disruptions.
At 09:35 ET, Brent crude was down 0.4% at $68.85 a barrel, while West Texas Intermediate (WTI) fell 0.5% to $66.65.
Last week, oil rallied on speculation that Washington would impose sharp tariffs on Moscow. However, the softer tone from the White House prompted some profit-taking in the oil markets.
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