Dow Jones futures trade calmly ahead of US banks' Q2 earnings, inflation data

• Dow Jones futures flatten ahead of US banks' Q2 results and the US CPI data for June.
• US midcap stocks are outperforming blue-chip companies as earnings season kicks offMarkets.
• The Fed could support keeping interest rates at their current levels if the inflation data turns out hotter-than-expected.

Dow Jones futures trade quietly during the European trading session on Tuesday as investors await quarterly results from a number of United States (US) commercial banks and the Consumer Price Index (CPI) data for June, which will be published at 12:30 GMT.

At the time of writing, Dow Jones futures trade flat around 44,470. S&P 500 futures jump 0.45% to near 6,300. Significant gains in the 500-stock basket suggest strong demand for shares, which are moderately volatile.

US banking giants: JPMorgan Chase, Citigroup, and Wells Fargo are scheduled to release their second-quarter earnings for the current year. According to IG Markets, Citigroup is expected to show a slight increase in revenues, while Wells Fargo is anticipated to post flat numbers. Meanwhile, JPMorgan Chase is expected to report a decline in overall revenues.

On the data front, US CPI data will be the major highlight as investors will gauge cues about how much the latest sectoral tariffs imposed by President Donald Trump are influencing inflationary pressures.

As measured by the CPI, the US headline inflation is expected to have grown by 2.7% on year, faster than 2.4% in May. In the same period, the core CPI - which excludes volatile food and energy prices - rose at a faster pace of 3%, compared to the prior release of 2.8%. On month, both headline and the core CPI are estimated to have risen 0.3%, faster than the former reading of 0.1%.

Signs of accelerating price pressures would discourage Federal Reserve (Fed) officials from supporting interest rate cuts in the near term. This would be in contrast with President Trump's ambitions, who has criticized the Fed several times, especially Chairman Jerome Powell, for not bringing interest rates down.

On Monday, US President Trump criticized Fed Powell again for maintaining a restrictive monetary policy stance, stating the interest rates should be reduced to 1% or below. "We should be at 1%. We should be less than 1%," Trump said, Fox Business reported.