Only 0.6% away from the all-time high! The mild CPI cannot hide the shadow of bank stock earnings reports. S&P 500 falls below 6300 points.

On Tuesday, the S&P 500 index fell for the second time in the past three trading days, with financial stocks dragging down the market. Earnings reports from banks were mixed, and the positive report on cooling CPI was not enough to offset this impact. The index fell by 0.4%, after briefly rising by 0.5% and briefly surpassing the significant 6300 level after the opening bell. Meanwhile, the Nasdaq 100 index rose by 0.1%, setting a new closing record. The decline in bank stocks suppressed the overall market's upward momentum, with Wells Fargo & Company (WFC.US) falling by 5.5% after lowering its full-year net interest income expectations. BlackRock, Inc. (BLK.US) fell by 5.9% as the investment company's second-quarter net inflows did not meet analysts' expectations. Of the 11 sectors in the S&P 500 index, 10 sectors fell, with financials, materials, and healthcare stocks leading the declines, while tech stocks rose. All 24 stocks in the KBW Bank Index fell, except for Citigroup (C.US), which rose by 3.7% as traders capitalized on market volatility caused by trade tariffs to achieve the best second-quarter performance in the past five years. JPMorgan Chase (JPM.US) fell by 0.7%, despite its investment business revenue unexpectedly seeing a slight increase in the past quarter. The S&P 500 index is less than 0.6% away from its historical high. Traders are preparing for the weakest earnings season since the mid-2023, as well as evaluating the uncertainty brought by Trump's trade war tariffs. Analysts expect the S&P 500 index's second-quarter profits to only grow by 2.5% year-on-year; full-year growth expectations have been lowered from 9.4% in early April to 7.1%. Several significant companies are set to report earnings this week, with Goldman Sachs Group, Inc. (GS.US), Morgan Stanley (MS.US), and Bank of America Corp (BAC.US) set to announce their performance in the coming days. In early trading in the US stock market, stocks rose. The US Labor Department's report showed CPI inflation data relatively tame, which is a favorable signal for the Federal Reserve as it considers further interest rate cuts in 2025. The core CPI, excluding volatile food and energy components, rose by 0.2% month-on-month in June, below the market expectation of 0.3%. Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, wrote, "If inflation is indeed effectively controlled, the Fed can start cutting rates - maybe even taking action in September. But if subsequent reports show a different picture, the Fed will have to further postpone action." It is noteworthy that NVIDIA Corporation (NVDA.US) rose by 4% as the company plans to resume sales of its H20 artificial intelligence chips in the Chinese market after obtaining assurances from Washington for the shipment approval. Semiconductor company stocks also rose along with NVIDIA Corporation, including AMD (AMD.US) and Broadcom Inc. (AVGO.US). The Philadelphia Semiconductor Index rose by 1.3%. The Cboe Global Markets Inc. volatility index hovered around 17.3. In other markets, Apple Inc. (AAPL.US) rose by 0.2%. The company just reached a $500 million agreement to purchase rare earth minerals from MP Materials (MP.US). MP Materials is a US producer that also received support from the Pentagon last week. A basket index tracking the so-called "big seven giants," including Alphabet (GOOGL.US) and Meta (META.US), rose by 0.4%. Among other standout stocks, Trade Desk (TTD.US) rose by 6.6%. Earlier, the S&P Dow Jones Indices announced that this advertising technology company will join the S&P 500 index before the opening on July 18. Meanwhile, shares of wound care product manufacturers fell as the US government proposed changing the payment method for skin substitutes. MiMedx Group (MDXG.US) fell by 6.9%, and Organogenesis (ORGO.US) fell by 10%.