US stocks today: US stocks fall as hot CPI, Iran tensions weigh on sentiment

Wall Street's main indexes edged lower on Tuesday, with the S&P 500 and the Nasdaq ​pulling back from record highs after a hotter-than-expected inflation report and fading hopes for a swift resolution to the Middle East conflict.

U.S. consumer prices rose at a brisk pace for a second straight month in April, pushing annual inflation to its highest level in nearly three years and reinforcing expectations that the Federal ‌Reserve will keep ⁠interest rates ⁠unchanged for longer.

The Consumer Price Index increased 3.8% last month on an annual basis, while economists polled by Reuters had expected a 3.7% rise.


"We believe the financial markets ​have been a little slow to appreciate the economic damage that is building with higher prices, oil prices, raw materials, all those things that ​could accelerate global inflation," said Doug Beath, global equity strategist, Wells Fargo Investment Institute. "April had the highest S&P 500 returns since 2020. Obviously, earnings continue to exceed expectations. But I do think even though it (CPI)is a little bit higher than expected, it could be more important ​because of the fact the negotiations are still in limbo."

Although a strong earnings season ⁠has supported ‌sentiment, stalled negotiations between Washington and Tehran remain a concern for market watchers as surging oil prices fuel ​worries of higher inflation.

President ​Donald Trump said a ceasefire with Iran was "on life support" after Tehran rejected a U.S. proposal to ⁠end the conflict, keeping oil prices elevated as the key Strait of Hormuz shipping ​route remained closed.

Ahead of the war, traders had expected two rate cuts, per CME Group's ​FedWatch Tool, but currently expect the Federal Reserve to keep interest rates steady through the end of the year.

With the first-quarter earnings season drawing to a close, investors are turning to macroeconomic cues. Producer prices and retail sales data are also due this week.

At 10:00 a.m. ET, the Dow Jones Industrial Average fell 297.98 points, or 0.60%, to 49,406.49, the S&P 500 lost 43.98 points, or 0.57%, to 7,368.86 and the Nasdaq Composite lost 240.76 points, or 0.92%, to 26,038.27.

Eight of the eleven main S&P 500 sectors traded in ‌the red, with consumer discretionary stocks leading losses, down 1.1%.

All three major U.S. indexes advanced on Monday, with the S&P 500 and Nasdaq closing at record highs, supported by optimism around artificial intelligence and corporate earnings.

But the ​technology sector fell 0.9% ​on Tuesday. Chip stocks were mixed, ⁠with Nvidia rising 1.7%, while Intel shares eased 2% after climbing more than 17% in the previous two sessions. Qualcomm dropped 6% after hitting a record high in the previous session.

Among other movers, Zebra Technologies jumped 15% after the barcode scanner maker raised its annual ​sales growth forecast, betting on robust demand for its products that help automate manufacturing workflows.

Hims & Hers Health tumbled 12.3% after the telehealth firm missed Wall Street estimates for first-quarter revenue and posted a surprise loss.

Venture Global rose 4.7% after the LNG exporter raised its annual adjusted core profit forecast.

Declining issues outnumbered advancers