Energy and housing costs were the major drivers of inflation, but consumers are starting to feel the impact of tariffs on basic goods.

The risk is that a hotter-than-expected June inflation report — one that Fed Chair Jerome Powell recently called among the most important for assessing the impact of tariffs — could slow the pace at which the central bank lowers interest rates. Importantly, that could also throw a wrench into the stock market’s record-setting rally.

Shares were mixed Wednesday in Europe and Asia after an update on U.S. inflation pulled most Wall Street stocks lower, though gains for Nvidia pushed the Nasdaq to another record. The report showed inflation in the United States accelerated to 2.

U.S. producer prices were unexpectedly unchanged in June as a tariff-driven increase in the cost of goods such as communication and related equipment was offset by softening demand for travel services.

As inflation rises up once again, the White House is doubling down on its tariff plans for countries around the world. President Trump claims Americans could see savings soon.