LONDON – Wall Street's main indexes opened lower on Tuesday after a solid rise in consumer prices in June reignited worries about economic growth peaking, while upbeat earnings reports from banks and PepsiCo kept declines at bay.

The Dow Jones Industrial Average fell 36.2 points, or 0.10 percent, at the open to 34959.96. The S&P 500 declined 3.6 points, or 0.08 percent, at the open to 4381.07, while the Nasdaq Composite dropped 18.1 points, or 0.12 percent, to 14715.133 at the opening bell.

Meanwhile, global shares dipped back from record highs as investors digested news of US consumer prices rising by the most in 13 years, reinforcing expectations of tapering by the US Federal Reserve.

The US consumer price index rose 0.9 percent last month, the largest gain since June 2008, after advancing 0.6 percent in May, the Labor Department said.

"It was a very, very strong number…," said Kathy Lien, managing director at BK Asset Management in New York. "It kind of reinforced the Fed taper story and the dollar has been consolidating for the front of the week and I think this was the kick that it needed to renew its gains."”

MSCI's all-country equity index dipped slightly, having touched a record high earlier in the day. The pan-European STOXX 600 index was flat after hitting a record high in early trading.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1 percent, its best daily gain since late June, led by a 1.6 percent rise in the Hong Kong Special Administrative Region, where tech stocks rose broadly. Japan's Nikkei was up 0.5 percent while Australian shares closed broadly flat.

Powell testimony

Investors are navigating a busy week, with the onset of US earnings season and a testimony by Federal Reserve Chair Jerome Powell, which will also be scrutinized for any indications on the timing of potential US tapering.

In the HKSAR, tech behemoth Tencent Holdings Ltd jumped 3.9 percent after the Chinese mainland's antitrust regulator on Tuesday approved its plan to take search engine Sogou Inc private in a US$3.5 billion deal.

The S&P 500 banks index climbed 1.3 percent ahead of quarterly earnings reports this week from major banks. JPMorgan Chase rose over 1 percent and Goldman Sachs rallied more than 2 percent, fuelling the Dow's gains.

The next question is whether company earnings will support Wall Street's run higher.

S&P 500 companies' earnings per share for the June quarter are expected to rise 66 percent, according to IBES data from Refinitiv. JPMorgan, Goldman Sachs, Bank of America and other big banks kick off results from Tuesday.

In the short term, equity markets have "considerable support from earnings revisions", said Michel Iglesias del Sol, managing director, Investment Strategy Advisory, Kempen Capital Management, who expects this season to mark the peak of the earnings rebound in the United States, with Europe likely to peak in coming months.

"Equity valuations are high when compared to historical levels, but not when you compare them with other asset classes," he said.

Dollar nudges higher

Concerns that increasing Delta variant cases around the world could derail a global economic recovery have fuelled appetite for safe-haven US Treasuries. The benchmark US 10-year bond yield fell last week to a five-month low of 1.25 perceny.

While markets have since stabilized, yields are not far off last week's lows at 1.3577 percent.

Euro zone government bond yields have fallen in line with US Treasuries in recent weeks, and are running close to their lowest levels since early April.

Germany's 10-year bond yield was unchanged at -0.30 percent, close to a three-month low of -0.344 percent that was hit last week.

The US dollar currency index rose after the data and was last up 0.4 percent at 92.541 against a basket of major currencies.

South Africa's rand dropped to a three-month low, slipping 1.2 percent to 14.4000 against the dollar, as violence escalated over the jailing of former president Jacob Zuma.

US crude ticked up 0.1 percent to US$74.18 a barrel. Brent crude rose 0.3 percent to US$75.40 per barrel.

Spot gold traded up 0.1 percent at US$1,806.90 per ounce.