US Markets
Nasdaq, S&P 500 Retreat From Record Highs Amid Losses in Tech Sector
The Nasdaq Composite and the S&P 500 fell Tuesday as technology shares slid, with traders apparently spooked by a hotter-than-anticipated inflation report and higher oil prices.The Nasdaq shed 0.7% to 26,088.2, while the S&P 500 lost 0.2% to 7,401, following their back-to-back record closing highs. The Dow Jones Industrial Average added 0.1% to 49,760.6, rising for a third consecutive session. Most sectors ended in the green, led by healthcare, while consumer discretionary saw the steepest decline.Shares of several big tech names tumbled with Qualcomm (QCOM) sliding nearly 12%, the worst performer on the S&P 500. Intel (INTC) followed Qualcomm on the index, down 6.8%. Salesforce (CRM) dropped 3.5%, the steepest decline on the Dow, followed by IBM (IBM), which fell 1.9%.Micron Technology (MU), Oracle (ORCL), Advanced Micro Devices (AMD), Dell Technologies (DELL), Microsoft (MSFT) and Amazon.com (AMZN) also logged declines.In economic news, US annual consumer inflation accelerated in April to the fastest pace in almost three years as energy prices surged amid the near-complete closure of the Strait of Hormuz. Core inflation, which excludes the volatile food and energy components, hit a seven-month high, official data showed."The unfavorable and larger-than-expected jump in core prices shows pressures are now spreading beyond energy, transportation, and food, into larger categories such as services and housing," Scott Anderson, chief US economist at BMO, said in a report. "If the energy price shock doesn't subside soon, we can expect more of the same in the months ahead."Energy prices surged nearly 18% annually last month, marking the biggest jump since September 2022, official data showed."The closure of the Strait of Hormuz is doing significant damage to the (Federal Reserve's) ability to hold the line on inflation," Anderson said. "At a minimum, this inflation report will keep the Fed on hold longer and may facilitate a move toward a more neutral policy stance at upcoming meetings -- removing the (Federal Open Market Committee's) implicit rate cut bias."The Fed, which late last month kept its policy rate steady for a third consecutive meeting, is widely expected to stay put again next month, according to the CME FedWatch tool. Its latest policy statement include an easing bias, which was opposed by three regional presidents.Chicago Fed President Austan Goolsbee said inflation data on the services side was "unexpectedly disappointing," Reuters reported.Inflation is "going the wrong way, and it's going the wrong way not just in oil-related things and not just in tariff-related things," Goolsbee was quoted as saying at an event in Rockford, Illinois.US Treasury yields were higher, with the 10-year rate up five basis points at 4.46% and the two-year rate rising 3.2 basis points to 4%.West Texas Intermediate crude was last up 4.4% at $102.39 per barrel, while Brent rose 3.5% to $107.86.US President Donald Trump recently rejected Iran's counteroffer to end the war, extending uncertainty around oil flows through the crucial Strait of Hormuz.Trump is now more seriously considering restarting military operations against Iran than he has in recent weeks, CNN reported, citing his aides. Trump, who will fly to Beijing this week, reportedly said he will have a "long talk" about the Iran war with Chinese leader Xi Jinping, though he downplayed the idea he would want China to play a role in ending the conflict."The global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz," Saxo Bank said in a report.In company news, EBay (EBAY) rejected video game retailer GameStop's (GME) proposal to acquire the e-commerce company in what would have been a $55.5 billion deal. EBAY shares rose 2.1%, while GameStop fell 3.5%.Gold was last down 0.2% at $4,721.20 per troy ounce, while silver gained 1.6% to $87.30 per ounce.
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