Dow, S&P 500, Nasdaq Slip as Investors Brace for Key Inflation Data

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U.S. stocks closed lower Monday as Wall Street turned cautious ahead of Tuesday’s July Consumer Price Index (CPI) release, which traders view as the most pivotal economic report before next month’s Federal Reserve policy meeting.

The Dow Jones Industrial Average fell 200.52 points, or 0.45%, to 43,975.10. The S&P 500 lost 16 points, or 0.25%, finishing at 6,373.45, while the Nasdaq Composite dropped 64.62 points, or 0.30%, to 21,385.4. Declining stocks outnumbered advancers on the NYSE, with just under 40% of shares rising.

Markets are on edge over whether the CPI will confirm that inflation pressures are reaccelerating. Economists expect core CPI to rise 0.3% in July from June’s 0.2%, pushing the annual rate to 3.0% from 2.9% — the first move above 3% since February. Headline CPI is forecast to gain 0.2% month-over-month and 2.8% year-over-year. Analysts warn that a hotter reading could complicate the Fed’s plan to begin cutting rates later this year.

Traders will watch goods prices closely, as June data hinted at a rebound driven by higher import costs and tariffs. Reciprocal tariffs averaging about 20% took effect August 7, though July’s CPI will reflect earlier rounds that generated nearly $30 billion in collections last month. The Fed maintains that tariff-related inflation will be temporary, but persistent increases in goods and services could shift sentiment toward the hawkish camp.

The cautious tone in equities comes amid sharp moves in commodities. Gold futures for December delivery tumbled $88.50, or 2.53%, to $3,402.80, marking one of the metal’s steepest one-day drops this year. In contrast, Crude oil futures for September edged higher by 0.30% to $64.07 after trading in a narrow intraday range.

Earnings news also weighed on sentiment. Shares of C3.ai plunged nearly 40% after the company issued a “catastrophic” revenue warning, missing guidance by 33% and triggering multiple analyst downgrades. Non-GAAP operating losses widened sharply, and leadership uncertainty following CEO Tom Siebel’s resignation added to investor unease.

On Holding AG, set to report results tomorrow, traded under pressure ahead of earnings despite expectations for a 53.5% jump in revenue. Analysts are watching whether the Swiss athletic brand can offset rising tariffs on Vietnamese imports and maintain its high-margin profile.

Away from markets, Washington saw heightened security activity following a White House directive mobilizing the District of Columbia National Guard to address violent crime in the nation’s capital. In a memorandum, President Donald J. Trump cited “the destructive forces of criminal activity” and directed the Secretary of Defense to deploy Guard members “in such numbers as he deems necessary” until law and order are restored. The move comes amid data showing D.C.’s homicide rate at 27.3 per 100,000 residents in 2024 — one of the highest in the country, according to the White House press statement.

With CPI looming, investors face a potential inflection point. A softer inflation print could reinforce expectations for a September rate cut, while a hotter report might trigger a sharp repricing in rates and further pressure on equities — particularly in high-valuation sectors. As one analyst note put it, this week’s CPI “is less about a single number and more about the story it tells” about whether the U.S. is emerging from or reentering a phase of stubborn price pressures. 📺 Why Smart Money Is Watching This Sugar ETF