Tomorrow’s U.S. CPI report is the next big test for the markets. Will inflation remain concentrated in energy, or will the data show price pressures spreading more broadly? That question took on added importance after Susan Collins, president of the Boston Fed, reiterated her support for another rate hike before year-end.Tuesday’s market moves were mixed. The dollar gave back ground against all the major currencies, longer-term Treasury yields moved lower, and stocks were modestly lower after a volatile session. Oil continued higher as Middle East tensions kept supply and shipping risks in focus. Existing-home sales beat expectations, but the report had little market impact.Dollar gives back some groundThe dollar was lower across the major currencies in the late-session snapshot. Its largest decline was against the Canadian dollar, while its smallest decline was against the yen.The currency levels showed:EURUSD: 1.1196, +0.39%.USDJPY: 158.30, −0.20%.GBPUSD: 1.3251, +0.34%.USDCHF: 0.8324, −0.24%.USDCAD: 1.4213, −0.48%.AUDUSD: 0.6981, +0.32%.NZDUSD: 0.5611, +0.45%.Higher oil provided a supportive backdrop for the Canadian dollar as did technicals (see post here).. More broadly, the dollar’s retreat reversed some of Monday’s strength as traders positioned ahead of CPI.Longer-term Treasury yields easeThe late-session Treasury snapshot showed a modest rise in the 2-year yield, while longer maturities moved lower:2-year: 4.7974%, +0.64 basis points.5-year: 5.0085%, −1.25 basis points.10-year: 5.2168%, −2.72 basis points.30-year: 5.5660%, −3.33 basis points.The curve flattened as longer-term yields fell more than short-term yields. The move offered some relief from elevated borrowing costs, but with the 10-year still above 5.2%, yields remain an important consideration for equities.Stocks lower after a volatile sessionThe modest late-session declines hide a much wider trading range, particularly for the Dow. It was up 466.06 points at its high and down about 263 points at its low. The S&P and Nasdaq Composite also traded on both sides of unchanged. The Nasdaq 100 remained lower throughout the session.The supplied late-session levels showed:Dow industrial average: 51,675.16, −181.02 points or −0.35%.S&P 500: 7,805.45, −1.79 points or −0.02%.Nasdaq Composite: 27,204.38, −41.52 points or −0.15%.Russell 2000: 2,783.37, −11.11 points or −0.40%.Nasdaq 100: 30,569.48, −95.22 points or −0.31%.Earnings begin, but buyers remain cautiousEarnings season got underway with reports from JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, Johnson & Johnson and UnitedHealth. In the earlier update, all six shares were trading lower.The reactions underline that beating estimates alone does not guarantee a higher share price. Goldman Sachs beat both earnings and revenue expectations, while JPMorgan missed both. Traders also have to weigh guidance, valuations and the broader backdrop of higher energy costs and elevated interest rates.European shares close mostly lowerEuropean markets finished with small declines in most major indices, while Italy edged higher:Germany’s DAX: 25,259.91, −0.07%.France’s CAC 40: 7,827.64, −0.07%.UK’s FTSE 100: 10,650.34, −0.06%.Spain’s IBEX 35: 19,210.70, −0.39%.Italy’s FTSE MIB: 50,057.17, +0.04%.Collins focuses on the breadth of inflationSusan Collins, president of the Boston Fed, said economic uncertainty is elevated and that she is watching how widespread inflation pressures become.Her comments followed earlier remarks supporting another rate increase before the end of 2026. She highlighted AI and data-centre investment, tariffs and energy costs tied to the Middle East war as potential sources of persistent inflation.For traders, the distinction matters. Higher gasoline prices can lift headline inflation directly. A broader rise in goods and services prices would suggest the pressure is becoming more entrenched—and give the Fed a stronger reason to tighten further. Collins’ comments kept that question front and centre ahead of CPI.New York Fed President John Williams also spoke today and said one more rate hike is appropriate this year, but he currently sees no need for another increase in 2027. He expects inflation to slow considerably and approach the Fed’s 2% target next year, noting limited broader price pressures outside AI and energy and no signs that the labor market is fueling inflation.The comments eased concerns about further tightening next year, helping push Treasury yields lower and extending the dollar’s losses. However, Williams did not signal rate cuts. His outlook remains dependent on inflation slowing as expected.Home sales beat, but have little impactSeptember existing-home sales came in at an annualized rate of 3.99 million, above the 3.95 million estimate. Sales increased 1.5% month over month but remained 2.2% below a year earlier.The South and West recorded monthly gains, the Midwest was unchanged, and the Northeast declined. Sales were lower year over year in all four regions.Higher inventory and longer selling times are giving buyers more negotiating power, but rising mortgage rates remain a hurdle. The report offered a modest improvement in a still-soft housing market and did little to shift attention away from inflation and the Fed.Oil rises as Middle East risks persistCrude oil futures settled at $94.14, up $0.40 or 0.43%. The later supplied snapshot showed the CL1! contract trading at $94.93, up $1.19 or 1.27%.Reports of discussions between President Trump and Israeli Prime Minister Benjamin Netanyahu about renewed action against Iran, threats to shipping near the Strait of Hormuz, and Saudi-led strikes against a Houthi-linked oil facility in Yemen kept escalation risks in focus.The concern extends beyond oil supply. Sustained strength in fuel prices can raise transportation and production costs, keeping the broader inflation question alive.Gold and silver fail to benefit from the weaker dollarSpot gold was trading near $4,159.65, down $12.00 or 0.29%. Silver fell $1.164 to $59.1325, a decline of 1.93%.A weaker dollar and lower longer-term yields would normally help gold. Tuesday’s decline shows those supportive moves were not enough to bring buyers in ahead of CPI. Silver’s larger fall also stood out, although the supplied data do not identify a specific catalyst.Bitcoin reboundsBitcoin was trading at $83,314, up $1,568 or 1.92%.The gain contrasted with softer equities and precious metals. The weaker dollar provided a supportive backdrop, but one session does not establish a lasting change in Bitcoin’s relationship with other risk assets.CPI is the next shoveWednesday’s September CPI report is due at 8:30 AM ET. InvestingLive’s preview points to headline inflation rising 0.6% month over month and about 3.7% year over year, with core inflation increasing around 0.2% monthly and holding near 2.4% annually.The core reading and the breadth of price increases will be key. A firmer underlying number could revive expectations for an earlier Fed hike, while a softer reading would give policymakers more room to wait. Alongside CPI, traders will be watching oil, Middle East headlines and the next round of earnings. This article was written by Greg Michalowski at investinglive.com.