NEW YORK: Wall Street indices fell at the open Tuesday as government data confirmed another spike in inflation in June, but the drop was not particularly severe.

Before markets opened, the Labor Department said the Consumer Price Index (CPI) rose 5.4 percent, seasonally adjusted, in June over the preceding 12 months, its biggest gain since August 2008, and 0.9 percent if compared to May.

Much of the increase was due to a 10.5 percent gain in used car prices, though gasoline surged 45.1 percent over the past year, unadjusted, and 2.5 percent in the month.

The spike in prices could challenge the Federal Reserve, which has bet it can keep its lending rate at zero for longer to spur maximum employment, and that price increases will be temporary.

Wall Street has climbed in recent months as traders bet on the zero-rates strategy and all three major indices finishing Monday's session at records.

Though CPI isn't the Fed's preferred inflation gauge, the high reading sent indices marginally lower.

About 20 minutes into trading, the benchmark Dow Jones Industrial Average has declined 0.1 percent to 34,976.78.

The broad-based S&P 500 fell 0.1 percent to 4,382.44, while the tech-rich Nasdaq Composite Index was flat at 14,737.85.

"The focal point for traders today will be whether it actually puts the transitory inflation narrative to the test," Patrick O'Hare of Briefing.com said of the data.

However "these hot inflation prints could be the peak, or close to it, in terms of the pandemic recovery period. That may be true, yet the balancing act for the market is determining how far inflation rates are going to fall from the peak," he said.

Goldman Sachs and JPMorgan Chase both reported soaring second-quarter profits compared with the year-ago period before markets opened. However, JPMorgan shares were trading 1.1 percent lower while Goldman Sachs lost 1.2 percent.

Boeing was down 3.2 percent after saying it will temporarily reduce production of its 787 Dreamliner plane after identifying a new issue with the jet during inspections.