U.S. stock-index futures edged lower Tuesday as investors sifted through another round of hotter-than-expected inflation data and parsed quarterly results from some of the country’s biggest banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc.

How are stock benchmarks trading?

Futures for the Dow Jones Industrial Average
YMU21,
-0.11%

YM00,
-0.11%

were down 83 points, or 0.2%, at 34,792.

S&P 500 index futures
ESU21,
-0.25%

ES00,
-0.25%

were down 13.25 points, or 0.3%, at 4,363.25.

Nasdaq-100 futures
NQU21,
-0.22%

NQ00,
-0.22%

declined 41.50 points, or 0.3%, to 14,827.75.

On Monday, all three stock benchmarks finished at all-time highs for the second straight session with the Dow
DJIA,
-0.15%

narrowly missing its first close above 35,000. The Dow rose 126.02 points, or 0.4%, to end at a record 34,996.18, the S&P 500
SPX,
-0.12%

added 15.08 points, or 0.4%, closing at a record 4,384.63; while the Nasdaq Composite Index
COMP,
-0.03%

advanced 31.32 points, or 0.2%, finishing at a record 14,733.24.

What’s driving the market?

Stock-index futures edged further into negative territory Tuesday after the U.S. consumer-price index showed a 0.9% June rise. The core reading, which strips out volatile food and energy costs, also rose 0.9%. Both measures were expected to show a 0.5% rise.

Year over year, the headline CPI was up 5.4% in June, while the core rate, excluding food and energy costs, rose rose 4.5% year-over-year, the sharpest move for that measure since September 1991 and well above the estimate of 3.8%.

The equity market reaction was relatively subdued though as bond yields edged up in reaction to the data.

While analysts have debated the fate of the so-called reflation trade, Nancy Davis, founder of Quadratic Capital Management, said she believes investors have only just started to think about inflation.

“The 10-year Treasury yield is significantly below the rate of inflation and a continuation of that dynamic would likely create challenges for fixed income investors,” she said, in emailed comments.

“An even bigger risk for investors, more so than inflation, is stagflation, which would bring rising consumer prices without much economic growth. Stagflation could hurt bonds and stocks at the same time,” she said, adding that the stagflation risk raises the importance of uncorrelated assets in an investment portfolio.

Soaring inflation stems in large part from supply disruptions as demand soars with the reopening of the economy, but if prices pressure don’t ease in the near future it could put more stress on the U.S. recovery, some analysts fear.

Members of the Federal Reserve so far have insisted that inflation will wane soon once the U.S. and global economies regain a more normal footing, citing price pressures that have been mostly tied to temporary shortages that will fade away as supply catches up to demand.

In other U.S. economic data Tuesday, the National Federation of Independent Business said its small-business index rose in June to the highest level in eight months. The index was up 2.9 points to 102.5 and topped 100 for the first time since November. It had fallen in May for the first time this year.

Stock-market investors were also seeking insights from the start of the second-quarter earnings reporting season.

Results from banking giants JPMorgan Chase & Co.
JPM,
-1.46%

and Goldman Sachs Group Inc.
GS,
-0.32%

came in early Tuesday, both topping forecasts.

JPMorgan Chase shares edged lower ahead of the opening bell after reporting profit that more than doubled but a fall in revenues. Goldman shares moved higher after topping profit and revenue expectations and boosting its dividend by 60%. Both banks are constituents of the Dow Jones Industrial Average.

Meanwhile, the president of the St. Louis Fed James Bullard said Tuesday the Federal Reserve should start reducing the stimulus it provides to the U.S. economy, though he added the reduction didn’t need to start immediately. “I think with the economy growing at 7% and the pandemic coming under better and better control, I think the time is right to pull back emergency measures,” he told the The Wall Street Journal in an interview published Tuesday.

Check out: MarketWatch’s Need to Know column

Which companies are in focus?

The Centers for Disease Control and Prevention said it has received reports of 100 people who got the Johnson & Johnson JNJ shot developing Guillain-Barré syndrome, an immune system disorder that can cause muscle weakness and occasionally paralysis.

Shares of PepsiCo IncPEP were set to rally Tuesday, after the beverage and snacks company reported second-quarter profit and revenue that rose well above expectations and provided an upbeat full-year outlook.

Canadian cannabis company Organigram Holdings Inc. OGI posted a narrower loss for its fiscal third quarter than in the same period a year ago as revenue topped estimates. Shares were up 0.8%.

Altus Power Inc., the Connecticut-based clean electrification ecosystem company, is going public through a merger announced Tuesday with special-purpose acquisition company CBRE Acquisition Holdings Inc. CBAH, a deal that values the combined company at $1.58 billion.

 Boeing Co.
BA,
-2.66%

shares slid 2% in premarket trade Tuesday, after the aerospace giant said it has identified additional work that is required on its undelivered 787s, delaying their delivery through the rest of 2021.

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