The Dow Jones Industrial Average slid from its Tuesday high as an unexpectedly hot inflation report overshadowed a strong start to the second-quarter earnings season.

The Dow lost about 70 points, or 0.2%, after closing at a record just under 35,000 points the previous day. The S&P 500 traded around 0.2% lower after hitting a new intraday high at the start of the session. The Nasdaq Composite fell slightly from another intraday record, falling about 0.3%.

The downside in major averages came as 10-year US Treasury yields rose about 5 basis points, or 0.05%, and passed the 1.4% mark in a lagged reaction to recent inflation figures.

Inflation rose the fastest in nearly 13 years, the Labor Department reported Tuesday. The consumer price index rose 5.4% year-on-year in June; Economists polled by Dow Jones expected an increase of 5%. Core CPI excluding food and energy rose 4.5%, the largest increase for the metric since September 1991 and well above the estimate of 3.8%.

“Red hot CPI pressure in June is making markets nervous,” said Cliff Hodge, chief investment officer at Cornerstone Wealth. “We expect these inflation numbers to cool down in the future. June 2020 was the all-time low for core CPI during the pandemic shutdown, so comparisons get harder from here. Used car prices were up 45% year-over-year, which is unlikely to continue in the months ahead. “

San Francisco Federal Reserve President Mary Daly told CNBC on Tuesday that she believes recent inflation will prove temporary. Daly also said a strong economic recovery could allow the central bank to reduce its bond purchases by late 2021 or early 2022.

Daly’s comments and the latest inflation data came after major banks and PepsiCo released their second quarter earnings reports. But with stocks at record highs and the Dow Jones Industrial Average close to 35,000, expectations have likely been higher than official estimates suggested.

JPMorgan Chase’s shares fell after posting earnings of $ 11.9 billion, or $ 3.78 per share, in the second quarter, up the estimate of $ 3.21 by analysts surveyed by Refinitiv surpassed.

Banks reserved billions of dollars for loan losses during the pandemic, but released those reserves as consumers did better than expected. JPMorgan released $ 3 billion in credit risk reserves after only making $ 734 million in withdrawals. That put the company in $ 2.3 billion in profits, which allowed the bank to beat profit expectations. With this dissolution of loan loss reserves, investors can give less credit to JPMorgan’s bottom line.

Goldman Sachs shares also fell after the company reported earnings of $ 15.02 per share for the second quarter, beating analysts’ expectations of $ 10.24 per share. The bank had its second-best quarterly investment banking earnings when a rush of IPOs hit Wall Street last quarter.

PepsiCo shares rose more than 2% after the company put down estimates for its earnings and earnings in the second quarter due to returning restaurant demand. The beverage and snack giant has also raised its forecast.

Meanwhile, Boeing’s shares fell about 3%, which weighed on Dow sentiment after the aircraft maker halted production of the 787 Dreamliner after discovering a new bug.

According to FactSet, total earnings reports for the second quarter are expected in the coming weeks with earnings growth of 64% year over year for the quarter. That would be the biggest quarterly profit increase since 2009.

According to analysts polled by FactSet, bank earnings are expected to more than double in the second quarter with an estimated growth rate of 119.5% year over year.

In Monday’s regular trading session, the Dow rose 126.02 points to close just below 35,000. The blue chip measure has increased by 14% this year. The S&P 500 and Nasdaq Composite gained 0.3% and 0.2%, respectively, to close.

“High earnings expectations and any company’s forward guidance will drive markets higher or disappointment can lead to a small pullback in the equity markets,” said Jeff Kilburg, chief investment officer, Sanctuary Wealth. “Eyes will be on the big banks to set the tone for the next profitable weeks.”

Bank of America, Citigroup, Wells Fargo and Morgan Stanley also finished higher on Monday. They’ll report their earnings later in the week.

Federal Reserve Chairman Jerome Powell is due to appear before Congress Wednesday and Thursday for an update on monetary policy. He has claimed that the Fed’s loose policy will remain intact until further progress is made on its employment and inflation targets.