US stocks today: S&P 500 slips as hot inflation data signals rates to stay on hold

The S&P 500 retreated further from record highs on Wednesday, as hotter-than-anticipated producer prices reinforced bets that the Federal Reserve would keep monetary policy restrictive through the year. U.S. producer prices rose more than expected in April, marking the biggest increase since early 2022, signalling accelerating inflation amid the Iran war. The data follows a sharp rise in consumer inflation a day earlier, which knocked the S&P 500 and Nasdaq off record levels.

“This is very challenging data in terms of inflation and it means that Mr. (Kevin) Warsh is unlikely to move on rate cuts anytime soon, possibly for the rest of the year,” said Peter Cardillo, chief market economist at Spartan Capital Securities. Traders now expect the Fed to remain on hold, with a 34.3% chance of a rate hike by December, up from around 15% a week ago, according to the CME FedWatch Tool.

Markets are also bracing for a potentially more hawkish central bank under Kevin Warsh, who was confirmed to the board on Tuesday and could be elevated as chair soon, with Jerome Powell’s term ending Friday. Meanwhile, President Donald Trump arrived in Beijing with business leaders including Nvidia’s Jensen Huang and Elon Musk for talks with China’s Xi Jinping, though he has downplayed seeking Beijing’s help on Iran.


Oil prices were largely muted after recent gains, as investors monitored developments in the Iran conflict. A prolonged war could keep energy prices elevated, adding to inflation pressures and complicating the Fed’s policy path.

At 09:45 a.m. ET, the Dow Jones Industrial Average fell 0.50%, the S&P 500 slipped 0.19%, while the Nasdaq was little changed. Most sectors traded lower, led by utilities, although chip stocks stabilised with the Philadelphia Semiconductor index rising 1.7%.

Among individual stocks, Nebius Group surged after strong earnings, while broader market breadth remained weak with decliners outpacing advancers on both the NYSE and Nasdaq. Morgan Stanley, however, raised its year-end S&P 500 target, citing continued strength in corporate earnings.