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Below the Quote on Pre - Markets by Mr. Vikram Kasat, Head Advisory, PL Capital (Prabhudas Lilladher)

Markets took five on Tuesday, with all three major indexes falling ahead of tomorrow’s inflation report.

Dow Jones fell 184 points, S&P 500 was down 0.3%. Nasdaq fell 0.6%.

The yield on the 2-year Treasury note dipped to 4.22%. The 10-year yield was down to 4.68%.

The dog days of summer are here, characterized by thin volume, narrow index moves, and a lighter earnings flow, while market participants cast a wary eye on Treasury yields that keep tightening the vise

Investors are waiting for tomorrow’s consumer price index report. Economists are expecting to see that prices rose by 0.1% in July from June. If the numbers come in as expected, without signs of a big inflation bump, it could help alleviate fears that the Federal Reserve has to increase interest rates sooner rather than later.

Of course, there’s always a risk that inflation surprises to the upside—particularly because oil prices spiked again toward the end of July as hostilities resumed between the U.S. and Iran. Brent crude oscillated around the $90 a barrel mark on Tuesday amid ongoing uncertainty over when the Strait of Hormuz would reopen. Traffic through the strait remains weak—over the weekend, confirmed crossings fell from 15 on Friday to 11 on Saturday and just six on Sunday

Negotiations got a bit more complicated on Monday. Now that both the U.S. and Iran are demanding reparations from each other to end the conflict, dashing any remaining hopes of a quick resolution.

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