Stocks extended their losses Tuesday as investor braced for a key inflation report Wednesday, and  assessed more earnings reports.

The S&P 500 was down 0.4%, as the Dow Jones Industrial Average dropped roughly 0.2%. The Nasdaq dropped 1.2% as chip and technology stocks proffered dour earnings reports.

Micron led the way down for the Nasdaq, as shares lost 3% after the chipmaker announced its fourth quarter revenue would be on or below the lower end of its forecast provided in an earnings call June 30th.

Micron’s announcement came a day after Nvidia made it known Q2 revenue would drop 19% from the prior quarter due to the gaming business contending with fewer purchases of discretionary items like laptops and gaming consoles.

Both Morgan Stanley Chief Investment Officer Michael J. Wilson and Goldman Sachs Chief U.S. Equity Strategist David J. Kostin had warned clients in separate notes that companies will face severe cost pressures next year which will cause corporate profit margins to contract.

Wilson wrote, “While prices to the end consumer are still rising at a rapid clip, prices for producers are rising at double the pace,” adding that higher margin estimates by analysts for 2023 are “unrealistic due to sticky cost pressures and receding demand.”

So far, 90% of companies in the S&P 500 have reported Q2 earnings. Of those that have reported surprise failures to meet earnings guidance, they have seen no price changes on average for two days prior to the earnings release, to two days after the report. The five-year average has been a 2.4% drop during that window, according to data from Fact Set Research.

FactSet Senior Earnings Analyst John Butters noted, “The market has not punished S&P 500 companies that have reported negative EPS surprises on average.”

That echoes the warnings of Wilson and Kostin, who indicated market behavior is not in line with profit outlooks right now.

Now investors will begin lookin ahead to the July Consumer Price Index which will come out Wednesday.

Analysts expect a headline reading which will be slightly moderated from last month’s number, mainly due to lower gas prices. Experts still expect it will show inflation climbing at the highest level in 40 years. A Bloomberg survey of economists found the broadest measure of CPI should come in at 8.7% in July.