Hotter-than-expected May CPI data and escalating geopolitical risks drive midday losses across major U.S. equity benchmarks.
The S&P 500 fell 1% to 7,312.58 at midday, led by declines in AI and semiconductor stocks amid rising inflation and Iran-related geopolitical tensions. The Nasdaq Composite and Dow Jones Industrial Average dropped 1.27% and 1.22%, respectively, as investors reacted to fresh economic data and oil price volatility.
May’s Consumer Price Index hit a three-year high of 4.2%, while core inflation rose 2.9% year-on-year, dimming hopes for Federal Reserve rate cuts. Wall Street had anticipated easing this year, but some economists now expect a potential rate hike. Escalating hostilities in Iran and threats to the Strait of Hormuz pushed oil prices higher, adding to inflationary pressures.
Super Micro Computer plunged over 17% after announcing a $7 billion equity raise, while Nvidia and Micron Technology extended losses. Robinhood Markets bucked the trend, rising 6% on a strategic update.