Inflation report Tuesday should provide clues on the impact tariffs are having on prices

June's inflation report will be looked at not so much for what the headline numbers show than what's in the underlying data, especially whether tariffs are starting to have an impact.

The consumer price index, due Tuesday at 8:30 a.m. ET, is expected to show an uptick in both headline and core readings, with the latter still well above the Federal Reserve's target.

But what will really matter is the extent to which President Donald Trump's tariffs are hitting prices and potentially driving inflation higher.

“June is the first reading [when] these tariffs are really going to start to bite in a very noticeable way,” said Chris Hodge, head U.S. economist at Natixis CIB Americas.

CPI, which measures a broad basket of goods and services across the U.S. economy, is expected to show a 0.3% monthly increase for both headline and core rates, with the latter excluding volatile food and energy costs. On an annual basis, the index is expected to show a 2.7% headline reading and 3% on core.