Stocks Settle Lower Ahead of Wednesday’s CPI Report

U.S. stocks closed lower ahead of Wednesday’s CPI release, with the S&P 500 down 0.32%, the Dow down 0.34%, and the Nasdaq 100 down 0.33%. The article frames the pullback as a macro-driven move: higher crude oil prices from renewed Middle East/Strait of Hormuz risks lifted inflation expectations, while hawkish Fed commentary added pressure. Bond yields eased modestly on hopes for a cooler CPI print, but that support was not enough to offset inflation concerns. The piece also notes that strong Q2 earnings, especially from AI infrastructure companies, remain an important offset for equities. Sector-wise, software names were weak, while chipmakers, AI infrastructure stocks, and some asset managers outperformed. Overall, the market tone is cautious and event-driven, with Wednesday’s CPI expected to be the key catalyst for near-term direction in equities and rates.