Rising core inflation and foggy tariff risks inject fresh uncertainty into the Federal Reserve and interest rates.

Scott Helfstein, head of investment strategy at Global X, added that there’s “little evidence” tariffs are causing a meaningful rise in inflation at this point, noting that shelter and energy services like electricity and piped gas remain primary drivers.

Small-cap stocks and other rate-sensitive equities were surging on Tuesday after July's consumer-price index reading gave investors more confidence around likely interest-rate cuts. "You can see areas of the market that are more interest-rate sensitive outperforming,