Stocks fell ahead of June's inflation report, with the Treasury curve inversion deepening to levels last seen in 2007, as investors worried that rate hikes would send the economy into a recession.

The S&P 500 extended its losses into a third day as megacap tech sold off and energy shares followed oil down. The 10-Yr US note yield fell as much as 12 basis points below the Two-Year rate. Inversions of the curve are a possible indicator of an impending economic downturn.

According to economists, inflation continued to rise in June, reaching a pandemic level that will keep the Federal Reserve on the lookout for another big hike.

The consumer price index is expected to rise 8.8% from a year ago on Wednesday, the largest increase since 1981.