US stocks erase early gains, close lower as inflation data spurs questions about the Fed's next move

• US stocks erased earlier gains Tuesday even after key inflation data revealed prices rose less than expected in August.
• The Consumer Price Index gained 0.3% last month, reflecting a slowdown in price pressure from the July 0.5% gain.
• The chief equity strategists at both RBC and Morgan Stanley are warning of an upcoming stock market correction.$4

US stocks erased earlier gains Tuesday even after key inflation data revealed prices rose less than expected in August. All sectors in the S&P 500 closed in the red while Apple sunk 1.37%. The Dow Jones Industrial Average fell almost 300 points.

$4- a popular measure of nationwide price growth - gained 0.3% last month. That was less than the 0.4% jump expected by economists and reflected a slowdown from July's 0.5% increase.

Here's where US indexes stood at the 4 p.m. ET close on Tuesday:

• S&P 500>$4: 4,443.05, down 0.57%
• Dow Jones industrial average>$4: 34,577.57, down 0.84% (292.06 points)
• Nasdaq composite>$4: 15,037.76, down 0.45%

While the data indicates a return of runaway inflation is unlikely, that doesn't mean there aren't risks to inflation running a bit too hot for too long, said Rick Rieder, BlackRock's CIO of global fixed income. He pointed to supply shocks and rapid price increases in household goods and housing as contributors to the slumping consumer sentiment in the US.

"The Fed should outline a tapering program, as we appear to already be close to maximum employment and simultaneously may be running the risk of overheating on inflation," Rieder said.

The chief equity strategists at both RBC and Morgan Stanley are warning of an upcoming stock market correction. $4 said valuations are becoming stretched and the S&P 500 could decline up to 10% before the end of the year. $4 noted that over half of the companies in the benchmark index have seen drawdowns of over 10% since the spring, a set-up that could prove dangerous in the future. He also is expecting a 10% correction before the year-end.

China's efforts to restrict cryptocurrency mining and trading have $4, where a regulator said it will be a part of broader clampdown. The area's cyberspace commission said crypto mining consumes an enormous amount of energy, which doesn't align with China's pledge to reach carbon neutrality before 2060.

In other cryptocurrency news, Steve Cohen, the billionaire founder of hedge fund Point 72 Asset Management, has agreed to personally $4, while high frequency trading firm Jump Trading is debuting its digital assets arm with a $4

$4 slipped 0.06% to $70.41 per barrel.$4, oil's international benchmark, slid 0.14%, to $73.61 per barrel.

$4 climbed 0.6%, to $1,805 per ounce.