Nasdaq scaled unprecedented heights during Tuesday's session despite investors confronting a hotter-than-anticipated inflation print and bracing for earnings season turbulence. Market resilience faces pivotal trials this week as Q2 earnings season commences alongside inflation data expected to reveal tariff cost pass-throughs. The initial report showed June's U.S. Consumer Price Index (CPI) accelerating at its fastest five-month pace, signaling tariffs may be stoking inflationary pressures. Yet underlying inflation maintained moderation, offering markets fractional solace against the headline surge.

Wall Street's earnings curtain-raiser proved underwhelming, with banking stocks whipsawing violently amid erratic trading. Wells Fargo slashed its net interest income outlook while JPMorgan shares declined despite investment banking divisions delivering surprise profits. Citigroup, however, soared to 2008-era peaks following share buyback announcements.

Monetary policy uncertainty intensified as four Federal Reserve officials – including Governor Barr – prepared Tuesday remarks that could illuminate the central bank's next steps. July rate cut prospects virtually evaporated post-CPI, with September reduction odds retreating from 60% to 55%. Fixed income markets reeled as the 30-year Treasury yield breached 5%, dragging long-dated bonds into the downdraft alongside shorter maturities. The dollar advanced across major currency pairs as investors recalibrated expectations.