The S&P 500 ended almost exactly flat as bank earnings split and the 10-year yield fell to a two-week low

Tuesday ended with a number that looked like a typo. After a day of big-bank earnings, another wobble in chip stocks and a bond market reopening from a holiday, the S&P 500 finished less than two points from where it began. The calm on the surface hid a lot of movement underneath, and most of it pointed toward one event: Wednesday morning's consumer price report.

How the session ended

The S&P 500 slipped 1.79 points to 7,805.45, according to the Associated Press, a fraction of a percent below its record close of 7,818.93 from October 6. The Dow Jones Industrial Average fell about 180 points, or roughly 0.35%, to 51,670.10, and the Nasdaq Composite lost about 42 points, or roughly 0.15%, to 27,204.38. Those closes match Yahoo Finance's end-of-day data; AP rounded the Dow and Nasdaq moves to 0.3% and 0.2%.

The Cboe Volatility Index, often called Wall Street's fear gauge, ended near 15.3, little changed according to Yahoo Finance data, and still low by historical standards.

The Dow's drop came largely from the banks. JPMorgan Chase, the only one of the four reporting lenders in the Dow, fell about 0.9% after a rare earnings miss. Citigroup lost about 5.6% and Wells Fargo about 3.1%, while Goldman Sachs, which posted the strongest numbers of the morning, gave back a premarket gain of more than 3% and finished down about 0.2%. The Financial Select Sector SPDR fund, a broad basket of financial stocks, closed down about 0.4%, after trading higher early in the day.

Chips bent but did not break

Semiconductor stocks spent much of the day extending a slide that began last week. Reuters reported the Philadelphia Semiconductor Index down about 1.5% at midday, at its lowest in roughly four weeks, after a fresh rout in South Korea, where Samsung Electronics and SK hynix fell sharply. The index recovered most of that loss into the close and finished down about 0.2%, according to Yahoo Finance.

Memory makers did not recover as much. Micron fell about 3.6%, its fourth straight decline, according to Reuters and Yahoo Finance, as investors weighed reports that China's CXMT has made progress on a denser memory-chip design. Western Digital closed down about 1.6%.

Bonds came back and yields eased

The Treasury market was closed for Columbus Day on Monday, so Tuesday was its first chance to react to a long weekend of news. The 10-year yield fell 2.7 basis points to 5.216%, its lowest close since September 25, according to Dow Jones Market Data, which uses Tradeweb's 3 p.m. values. That leaves it about 9 basis points below its 52-week high of 5.310%, set October 5. MarketsFN put the 2-year yield near 4.75%.

Lower energy prices early in the session helped, according to several market reports, though crude did not stay down. West Texas Intermediate crude for November delivery settled 40 cents higher at $94.14 a barrel, according to Newsquawk and investingLive. It traded as low as $91.70 before rebounding on reports of explosions near Saudi Aramco's headquarters in Dhahran, Newsquawk said. Gold futures ended near $4,182 an ounce, slightly lower on the day.

Rate pricing before the data

Futures markets still lean toward the Federal Reserve holding rates at its October 27-28 meeting. CME's FedWatch tool put the chance of a quarter-point hike in October at about 23.8% on Tuesday, and prediction market Kalshi priced it at 18.5%. A December hike remains the bigger debate: FedWatch data early Tuesday showed about a 70% chance of at least one quarter-point increase by year end.

That is why Wednesday matters. The Labor Department releases September's consumer price index at 8:30 a.m. ET. Economists surveyed by FactSet expect headline prices to rise 0.5% for the month, Morningstar reported, and Kiplinger's consensus was 0.6%. Both put the annual rate at 3.6%, up from 3.4% in August, mostly because of energy. Core prices, which strip out food and energy, are expected to rise about 0.2% for the month.

The question for markets is whether the jump in energy prices is spreading into everything else.

UBS economists, quoted by Kiplinger, said an upside surprise in core inflation "could revive the October debate." A reading close to forecasts, they added, would likely leave the Fed room to wait.

What carries into Wednesday

Three things are worth watching after Tuesday's session. First, the CPI report itself, and especially the core reading and services prices. Second, more bank earnings later in the week, which will show whether Tuesday's split between Goldman's trading boom and the softer results elsewhere was a one-day story. Third, the chip sector, which managed a late recovery on Tuesday after a losing streak that started last week but remains well below where it started the month.

With the S&P 500 sitting just below a record, the 10-year yield above 5% and oil above $90, the market has little cushion for an inflation surprise in either direction.