US equity markets closed Tuesday’s session with a divided picture, as hotter-than-expected consumer inflation data for April sent technology stocks lower and pushed oil above $102 per barrel, while more defensive and value-oriented names held up well enough to keep the Dow Jones Industrial Average marginally in positive territory.
The negative sentiment will continue today, as more investors could de-risk their positions on Wednesday.
The S&P 500 finished down 0.16% at 7,400.96, giving back part of the record-setting gains from the prior session, while the Nasdaq Composite fell 0.71% to close at 26,088.20 as the growth and technology-heavy index absorbed the bulk of the selling pressure triggered by the inflation data.
The Dow Jones Industrial Average bucked the trend with a 56-point gain of 0.11%, ending at 49,760.56, with healthcare giant UnitedHealth rising 3.17%, Walmart advancing 2.24%, and Coca-Cola gaining 1.83% leading the blue-chip index higher, while Salesforce fell 3.42% and IBM dropped 1.66% as the software-exposed names took a hit alongside the broader tech selloff.
April consumer prices rose 3.8% year-on-year, the highest reading since May 2023, with energy accounting for more than 40% of the monthly increase as the ongoing Iran conflict has kept Middle Eastern oil supply restricted and WTI crude settled above $102 per barrel on the session.
Micron Technology [NASDAQ: MU], which had led both the S&P 500 and Nasdaq to record highs on Monday, reversed course and fell 3.6% on Tuesday, giving back a small portion of the 53% surge it had recorded across April and the 37% gain from the prior week alone, as the inflation print prompted profit-taking across the overextended semiconductor complex.
Advanced Micro Devices [NASDAQ: AMD] fell approximately 2% and Qualcomm [NASDAQ: QCOM] dropped 11%, joining a broad chip sector retreat that reflected both the macro sensitivity of high-multiple growth stocks and the mechanical dynamic of profit-taking after extraordinary single-week gains.
Greenlight Capital president David Einhorn, speaking on the sidelines of the Sohn Conference in New York, told CNBC he had missed the market’s recent V-shaped recovery due to a defensive posture but maintained that equities remain “very, very pricey” on a historical basis, predicting that a better entry point would eventually emerge for those willing to wait.
Ahead of Nvidia’s [NASDAQ: NVDA] earnings report on May 20, Wells Fargo reiterated an Overweight rating with a price target raised from $265 to $315, while Susquehanna reiterated a Positive rating with a target lifted from $250 to $275, with both firms citing confidence that GB300 chip ramp progress will produce results and guidance ahead of consensus expectations.
On Wednesday morning, the producer price index for April added to inflation concerns, jumping 1.4% for the month, well above the 0.5% consensus estimate and the largest monthly gain since March 2022, while the annual wholesale inflation figure rose 6%, prompting Chris Rupkey of FWDBONDS to write that the Federal Reserve can only “groan” at data that leaves no justification for cutting rates regardless of political pressure from the administration.
Ewan is a reporter at the Foreign Policy Journal, primarily covering US current affairs and news related to NYSE-listed stocks. He has over two decades of experience in journalism and digital publishing.
