U.S. equity markets opened the week under pressure Monday, with the Dow Jones Industrial Average down 67 points, or 0.15%, and the S&P 500 slipping 6.16 points, or 0.10%, at the opening bell, as investors braced for a potentially pivotal inflation report and a closely watched earnings release from JPMorgan Chase.

The Nasdaq Composite showed early signs of resilience, inching up 2.10 points, or 0.01%, aided by a slight rebound in technology shares that have so far weathered inflationary crosswinds better than the broader market.

Tensions around tariffs and their inflationary impact continue to loom large. According to a July 2025 outlook from Apollo Global Management, the average effective tariff rate has surged from 3% in January to 18% today, adding 1.7% to price levels and reducing U.S. GDP growth by 0.7 percentage points in the short run. With the trade war increasingly seen as a stagflationary shock, markets are showing signs of strain as they attempt to price in lower growth alongside persistent inflation.

That narrative is likely to be tested Tuesday morning when the Bureau of Labor Statistics releases the June Consumer Price Index (CPI). Consensus forecasts anticipate a 0.3% month-over-month rise in both headline and core CPI, pushing annual inflation to 2.6% and 3.0% respectively. Analysts at Citi and Wells Fargo suggest the increase will be driven in part by core goods categories—such as apparel and electronics—where tariffs may now be filtering through to retail prices.

“Tariff revenues ramped up sharply in May and June,” the preview noted, “implying importers may soon begin passing costs to consumers”. However, inventory overhangs and consumer price sensitivity could delay the full effect, Citi warned.

Investor sentiment is also being shaped by JPMorgan’s upcoming second-quarter earnings, due Tuesday morning. The bank, viewed as a bellwether for the financial sector, enters earnings season with elevated expectations. Analysts forecast earnings per share of $4.49 on revenue of $43.98 billion. Yet concerns persist. CEO Jamie Dimon has flagged macroeconomic risks tied to inflation, tariffs, and fiscal deficits, cautioning that markets remain overly complacent in the face of rising rates and geopolitical uncertainty.

Dimon recently warned of a “40% to 50% chance that interest rates rise even further” and emphasized JPMorgan’s preparedness for a 5% rate environment. His remarks come amid a volatile bond market still digesting the implications of the U.S. government’s deteriorating fiscal position. Apollo’s outlook notes that Treasury auction sizes have risen 30% across the yield curve in 2024, while the CBO projects federal debt to balloon from 100% to 160% of GDP in the coming decades.

The energy and commodities space offered little respite. Gold futures for August delivery edged down $2.80, or 0.08%, to $3,361.20 per ounce, despite lingering inflation concerns. Crude oil fared marginally better, with August contracts climbing $0.28, or 0.41%, to $68.73 a barrel, although gains were capped by soft demand signals early in the trading day.

With the Federal Reserve widely expected to keep interest rates steady at 4.25%–4.50% during its next meeting, attention is shifting to September, where futures markets price in a 60% chance of a rate cut. But any upside surprise in tomorrow’s CPI report could derail those expectations and send yields—and volatility—higher.

In sum, the opening tone in U.S. equity markets reflects a wary balance between optimism for a soft landing and the emerging weight of tariff-induced inflation. With JPMorgan earnings and CPI data looming, traders appear poised for a week that could redefine the trajectory of the second half of 2025.