Traders work during the Hawkeye 360 Inc. initial public offering (IPO) at the New York Stock Exchange (NYSE) in New York, US, on Thursday, May 7, 2026.
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The S&P 500 slipped on Tuesday, weighed down by higher oil prices, as traders reacted to a hotter-than-expected annual consumer price index reading for April.
The broad market index was 0.5% lower, and the Nasdaq Composite dropped 0.8%. The Dow Jones Industrial Average traded down 344 points, or 0.7%.
West Texas Intermediate futures jumped 3% to trade above $101 per barrel. Brent crude climbed 3% to above $108. Those gains built on Monday’s advance, after President Donald Trump called the month-old ceasefire between the U.S. and Iran “unbelievably weak” and said it was “on massive life support” after rejecting an “unacceptable” counterproposal from Tehran to end the war.
In its latest counteroffer, Iran has insisted on war reparations, full sovereignty over the Strait of Hormuz, the release of frozen Iranian assets and lifted sanctions.
As energy prices remain elevated, even more attention will be given to inflation data to assess the impact of the Iran war on the U.S. economy.
In April, the consumer price index rose 0.6%, putting the annual inflation rate at 3.8%, according to the Bureau of Labor Statistics. While monthly move for headline inflation was in line with expectations, economists polled by Dow Jones were calling for a gain of 3.7% from a year earlier. That annual inflation rate was the highest since May 2023.
“Tuesday’s CPI marks the second consecutive reading above 3%, suggesting that inflation is roaring back largely driven by stubbornly high oil prices, which will dominate the inflation story for the rest of the year as the conflict continues to unfold in the Middle East,” said Skyler Weinand, chief investment officer at Regan Capital.
Meanwhile, Micron Technology — which led the S&P 500 and Nasdaq Composite to fresh record highs in the previous session — reversed course from its recent gains, falling more than 3%. The stock soared more than 37% last week and jumped more than 6% on Monday amid a memory chip rally. Alongside Micron, Advanced Micro Devices and Qualcomm dropped 1% and 6%, respectively.
— CNBC’s Anniek Bao and Jeff Cox contributed reporting.
