- After hotter-than-expected inflation data fueled bets on a jumbo hike by the Federal Reserve next week, equities experienced their worst day in more than two years. Treasury yields rose, and the dollar strengthened.

- The S&P 500 fell more than 4%, while the tech-heavy Nasdaq 100 fell more than 5%, with yield-sensitive stocks suffering the most. Both indices are on track for their worst one-day losses since 2020. Swaps traders are now fully pricing in a three-quarters-point rate hike, with bets rising for a similar move in November and policy rates eventually reaching around 4.3% early in 2023.

- The two-year treasury yield, which is the most sensitive to policy changes, increased by up to 22 basis points, pushing it more than 30 basis points above the 10-year rate and deepening an inversion in what is typically a recession warning.

- The consumer price index rose 0.1% in July from the previous month, according to labor department data released on Tuesday. Prices increased 8.3% year on year, a slight slowdown but still more than the median estimate of 8.1%. The so-called core CPI, which excludes the more volatile food and energy components, also exceeded expectations.