The S&P 500 closed lower for the second time in three sessions on Tuesday, dragged down by financial stocks as mixed banking earnings overshadowed encouraging CPI data. The benchmark index fell 0.4% after briefly breaching the psychologically significant 6300 level at the open. Meanwhile, the Nasdaq 100 edged up 0.1% to a fresh closing high.

Banking stocks weighed heavily on markets, with Wells Fargo (WFC.US) plunging 5.5% after cutting its full-year net interest income outlook. BlackRock (BLK.US) tumbled 5.9% as the asset manager's Q2 net inflows missed estimates. Ten of eleven S&P sectors declined, led by financials, materials, and healthcare, while tech stocks advanced.

All 24 components of the KBW Bank Index fell except Citigroup (C.US), which jumped 3.7% after traders capitalized on tariff volatility to deliver its strongest Q2 performance in five years. JPMorgan (JPM.US) slipped 0.7% despite unexpected growth in investment revenue.

Traders brace for the weakest earnings season since mid-2023 amid tariff uncertainty, with the S&P 500 sitting just 0.6% below its record peak. Analysts now project Q2 earnings growth of just 2.5% year-over-year, down from 9.4% in early April. Results from Goldman Sachs (GS.US), Morgan Stanley (MS.US), and Bank of America (BAC.US) loom later this week.

Early gains followed cooler-than-expected inflation data. Core CPI rose just 0.2% month-over-month in June, below the 0.3% forecast. "If inflation remains contained, the Fed could cut rates—potentially as soon as September," noted Chris Zaccarelli of Northlight Asset Management. "But conflicting data could force further delays."

Nvidia (NVDA.US) surged 4% on plans to resume H20 AI chip sales in China after securing U.S. approval, lifting chipmakers including AMD (AMD.US) and Broadcom (AVGO.US). The Philadelphia Semiconductor Index climbed 1.3% while the VIX hovered near 17.3.

Apple (AAPL.US) rose 0.2% after securing a $500 million rare earth minerals deal with Pentagon-backed MP Materials (MP.US). The "Magnificent Seven" basket gained 0.4%. Trade Desk (TTD.US) leapt 6.6% ahead of its S&P 500 debut on July 18, while wound-care stocks sank on proposed Medicare payment changes: MiMedx (MDXG.US) dropped 6.9% and Organogenesis (ORGO.US) plunged 10%.