The main Spanish stock market index fell back slightly on Tuesday, although it managed to close above 9,300 points after having lost this level during the session, with the boost of a better-than-expected inflation data in the United States.

A lower rise in US inflation in May reinforced expectations that the Federal Reserve will announce on Wednesday a temporary pause in its interest rate hikes, although pressure on underlying prices remains high, leading to expectations of further rate hikes at future meetings.

"I'm not sure they're going to be driven by inflation 'per se,' because, again, core inflation will remain stable for a while," Joseph LaVorgna, chief economist at SMBC Nikko Securities in New York, said of the possibility of future Fed rate hikes.

"They will be due to either overall GDP trends accelerating again or the labor market showing no signs of easing."

Expectations that the Fed will leave its target rate unchanged on Wednesday in a range of 5%-5.25% rose after the CPI data to 97.6%, while the probability of a rate hike at the Fed's monetary policy meeting ending July 26 rose to 60.6%, according to CME Group's FedWatch tool.

The Fed's rate decision will be followed on Thursday by the European Central Bank, which is expected to announce a further 25 basis point hike.

In this regard, it was reported on Tuesday that German investor confidence unexpectedly improved in June, although the threat of export headwinds continues amid global economic weakness.

As a result, the Spanish selective stock market index Ibex-35 closed Tuesday down 10.70 points, or 0.11%, to 9,333.70 points, while the FTSE Eurofirst 300 index of large European stocks rose by 0.71%.

In the banking sector, Santander rose 0.09%, BBVA fell 0.34%, Caixabank gave up 0.36%, Sabadell gained 0.20%, Bankinter gained 0.21% and Unicaja Banco lost 0.16%.

Among the large non-financial stocks, Inditex advanced 1.04%, Iberdrola dropped 0.65%, Cellnex fell 0.82%, and the oil company Repsol rose 1.50%.

Telefónica fell by 5.18% after discounting the dividend that will be paid next Thursday, the day after the deadline for the right to receive it.

Outside the Ibex-35, Almirall fell by 7.30% after announcing a capital increase with a discount of 5.7%.

(Reporting by Dario Fernandez; additional information by Herbert Lash and Samuel Indyk)