S&P 500 and NASDAQ reversed initial CPI-driven rallies after geopolitical risks overshadowed softer inflation data.
U.S. equities opened higher after softer-than-expected core inflation data, with the S&P 500 and NASDAQ gaining nearly 1% in early trading. The CPI report showed moderation in key components, offset by rising energy costs, but initial optimism faded as investors digested the details.
Sentiment turned negative after President Trump announced continued military actions against Iran, sparking a risk-off shift. Selling pressure intensified into the close, with technology and semiconductor stocks leading declines amid a broader sector rotation. Markets also braced for a $75 billion SpaceX IPO and upcoming offerings from Anthropic and OpenAI.
The Dow Jones fell 953 points, or 1.87%, while the S&P 500 and NASDAQ dropped 1.62% and 1.98%, respectively, closing near session lows.