Markets Brace for Key Inflation Data Amid Heightened Uncertainty

The S&P 500 and Nasdaq gained while Brent crude prices hit a 3-1/2-year low amid concerns over softening global demand. Investors await key inflation data and a debate between Vice President Kamala Harris and former President Donald Trump. Financial markets anticipate a Federal Reserve rate cut.

The S&P 500 and the Nasdaq gained ground while Brent crude prices plummeted to a 3-1/2-year low on Tuesday, amid growing concerns over weakening global demand. A day ahead of the crucial inflation data release, market participants are on edge, anticipating the Labor Department's consumer price index report and the first presidential debate between Vice President Kamala Harris and former President Donald Trump, locked in a tight race for the White House.

Data from China showed a spike in exports, likely in anticipation of stricter tariffs from trading partners, including the U.S. under its incoming administration. Megacap tech stocks and related sectors helped lift the Nasdaq, while the S&P 500 saw a modest gain. However, the Dow ended in the red.

"It feels like the calm before the storm," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "With the presidential debate and upcoming CPI inflation data, investors are in a holding pattern, refraining from major moves." Big banks faced pressure after Federal Reserve Vice Chair Michael Barr revealed sweeping revisions to bank capital plans, compounded by an interest income warning from JPMorgan Chase, indicating lingering economic challenges as year-end approaches.

(With inputs from agencies.)