S&P 500 slips from record Tuesday as chips rally takes a breather and inflation comes in hot: Live updates

The S&P 500 slipped on Tuesday, weighed down by losses in expertise shares and greater oil costs, as merchants reacted to a hotter-than-expected annual client value index studying for April.

The broad market index was 0.16% decrease, closing at 7,400.96, and the Nasdaq Composite dropped 0.71% to 26,088.20. The Dow Jones Industrial Common superior 56.09 factors, or 0.11%, and ended at 49,760.56.

Micron Know-how — which led the S&P 500 and Nasdaq Composite to record highs on Monday — reversed course, falling 3.6%. The inventory soared greater than 37% final week and round 53% final month amid a reminiscence chip rally.

Superior Micro Units and Qualcomm additionally dropped 2% and 11%, respectively. In April, AMD surged greater than 74%, whereas Qualcomm gained greater than 39%.

In the meantime, West Texas Intermediate futures jumped 4.19% to settle at $102.18 per barrel. Brent crude settled up 3.42% at $107.77. These positive factors constructed on Monday’s advance, after President Donald Trump known as the month-old ceasefire between the U.S. and Iran “unbelievably weak” and “on huge life help” after rejecting an “unacceptable” counterproposal from Tehran to finish the battle.

In its newest counteroffer, Iran has insisted on battle reparations, full sovereignty over the Strait of Hormuz, the discharge of frozen Iranian property and the lifting of financial sanctions.

With vitality costs excessive, merchants are giving shut consideration to the influence of the Iran battle on inflation and client spending, which nonetheless accounts for about two thirds of the financial system.

In April, the patron value index rose 0.6%, placing the annual inflation fee at 3.8%, based on the Bureau of Labor Statistics. Whereas the month-to-month improve in headline inflation was in line with expectations, economists polled by Dow Jones have been calling for a achieve of three.7% from a yr earlier. That annual inflation fee was the best since Could 2023.

“It is not prefer it’s an avalanche, nevertheless it’s a regular transfer upward,” Thomas Martin, senior portfolio supervisor at Globalt Investments, mentioned to CNBC, including that inflation is simply “going to maintain on constructing” the longer the battle in the Center East continues amid a lack of progress in negotiations between the U.S. and Iran.

“As these fuel costs and different costs are greater, it should crimp extra and extra individuals, so the setup is for there to be continued struggles for the patron,” he mentioned.

— CNBC’s Anniek Bao and Jeff Cox contributed reporting.