S&P 500 Slips as Hot Inflation Data and Oil Surge Rattle Markets

CNBC reported Tuesday that the S&P 500 retreated from record territory after April CPI inflation came in above Wall Street estimates, while a sharp jump in crude oil prices added further pressure on equities.

The benchmark index closed down 0.16% at 7,400.96. The Nasdaq Composite declined 0.71% to 26,088.20. The Dow Jones Industrial Average bucked the trend, finishing 56 points higher at 49,760.56.

Inflation Prints Above Expectations

Consumer prices rose 0.6% in April on a monthly basis, according to the Bureau of Labor Statistics. That pushed the annual headline rate to 3.8%, the highest reading since May 2023. Economists surveyed by Dow Jones had pencilled in a 3.7% annual gain, making the overshoot modest but notable for markets already on edge.

Senior portfolio manager Thomas Martin of Globalt Investments told CNBC the data reflects a slow, steady upward drift rather than a sudden shock. He warned the trend could persist the longer the U.S.-Iran conflict continues without a resolution. Martin added that higher fuel and goods prices are increasingly squeezing household budgets, threatening broader consumer spending that still drives roughly two-thirds of economic output.

Oil Jumps as Iran Talks Stall

Crude prices surged sharply on geopolitical concerns. West Texas Intermediate futures settled up more than 4% at $102.18 per barrel. Brent crude gained 3.42% to close at $107.77.

Also Read: Fed Holds Rates Steady Amid Stagflation Fears

The moves followed comments by President Donald Trump, who described the month-old U.S.-Iran ceasefire as dangerously fragile after Tehran submitted a counterproposal deemed unacceptable. Iran’s latest position reportedly demands war reparations, control over the Strait of Hormuz, and a full lifting of sanctions.

Chip Rally Takes a Breather

Micron Technology, which helped drive the S&P 500 and Nasdaq to all-time highs on Monday, fell 3.6% Tuesday. The stock had surged more than 53% over the prior month amid a broad memory chip rally. Advanced Micro Devices slipped roughly 2%, while Qualcomm dropped 11% despite posting a gain of nearly 40% in April alone.

Also Read: Micron Leads Semiconductor Stocks to Record High

Market Mood Stays Cautious

Veteran investor David Einhorn of Greenlight Capital told CNBC on the sidelines of the Sohn Conference that he views equities as historically expensive. He acknowledged missing the market’s recent V-shaped recovery but said valuations remain stretched and better entry points will eventually emerge.

Meanwhile, investor Jim Chanos disclosed he remains short Tesla, arguing the EV maker’s core business weakness outweighs speculative enthusiasm around its AI and data-center prospects.

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