US stocks edge lower as investors weigh earnings, inflation

Trader Jonathan Mueller works in his booth on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Stocks wobbled between small gains and losses in early trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation. (AP Photo/Richard Drew)

Traders Robert Charmak, left, and Edward Curran share a laugh as they work on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Stocks wobbled between small gains and losses in early trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation. (AP Photo/Richard Drew)

Trader Robert Gasparino works on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Stocks wobbled between small gains and losses in early trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation. (AP Photo/Richard Drew)

Trader Neil Catania, left, and specialist Thomas McArdle work on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Stocks wobbled between small gains and losses in early trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation. (AP Photo/Richard Drew)

Trader Richard Brophy works on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Stocks wobbled between small gains and losses in early trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation. (AP Photo/Richard Drew)

Trader John Santiago, left, works on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Stocks wobbled between small gains and losses in early trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation. (AP Photo/Richard Drew)

Stocks edged lower in afternoon trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation.

Inflation has been a lingering concern for the markets as investors try to gauge how it will impact everything from the economic recovery's trajectory to the Federal Reserve's reaction. The latest report from the Labor Department shows yet another increase in consumer prices in June that surprised economists.

The S&P 500 fell 0.3% as of 3:21 p.m. Eastern. The Dow Jones Industrial Average fell 102 points, or 0.3%, to 34,893 points and the Nasdaq was down 0.3%.

Most stocks within the benchmark S&P 500 were losing ground, but technology companies made solid gains and helped counter some of the broader drop. Banks fell broadly. The muted trading comes a day after the three major stock indexes set record highs.

Small company stocks took some of the heaviest losses. The Russell 2000 index was down 1.5%.

Prices for U.S. consumers jumped in June by the most in 13 years, extending a run of higher inflation that has been raising concerns on Wall Street that the Fed might consider withdrawing its low-interest rate policies and scaling back its bond purchases earlier than expected.

Much of the increase in prices for goods, such as used cars, is mostly tied to a surge in demand and lack of supply. But prices for many items, like lumber and other raw materials, either is easing or will ease as suppliers continue to ramp up operations, said Jamie Cox, managing partner at Harris Financial Group.

“That’s a problem and it shows up in all kinds of places but it’s not going to be there forever,” Cox said.

Major companies opened up the latest round of corporate earnings with investors listening closely for clues about how companies have fared during the recovery and how they see the rest of the year unfolding.

Goldman Sachs slipped 0.9% despite reporting the second-best quarterly profit in the investment bank's history. JPMorgan Chase fell 1.3% after giving investors a mixed report with solid profits but lower revenue as interest rates fell over the last three months.

Bond yields reversed course from early trading and rose to 1.41% from 1.36% late Monday. Overall, yields have been falling for months after a sharp spike earlier in the year.

The calmer bond market is partly signaling more confidence that rising inflation will likely be temporary and tied mostly to the economic recovery.

“That narrative is pretty well anchored and the bond market doesn’t fear the Fed tapering or raising rates,” Cox said.

Solid earnings did help some companies make gains. PepsiCo rose 2.1% after beating Wall Street's second-quarter profit and revenue forecasts.

Boeing fell 4% after announcing production cuts for its large 787 airliner because of a new structural flaw in some planes that have been built but not delivered to airline customers.