The Labor Department’s latest update to its consumer price index, a measure of how much Americans pay for goods and services including milk, cell phones and haircuts, weighed on Tuesday’s trading. Strategists blamed the CPI increase, the fastest pace of price appreciation in nearly 13 years, for keeping investors wary of the Federal Reserve, which could opt to hike interest rates if it thinks inflation is too wild.
Indeed, San Francisco Fed President Mary Daly told CNBC’s Steve Liesman that the time for tapering is approaching. “It is appropriate to start talking about tapering asset purchases, taking some of the accommodation that we have been providing to the economy down,” she said.
Banks kicked off a solid start to the second-quarter corporate earnings season, as JPMorgan Chase and Goldman Sachs had healthy profits. Both banks reported per-share earnings well ahead of estimates as a return to normal business activity and an end to Covid-19 restrictions boosted the U.S. economy. PepsiCo gained 2.3% following its own earnings report, while aircraft maker Boeing retreated 4.2% after cutting 787 Dreamliner production.
