Nasdaq tech stocks lead retreat as CPI reaches 3yr high
10am: Nasdaq opens lowest as semiconductor and techn stocks sold
Wall Street has joined in the Tuesday selling mood, led by the Nasdaq, down 0.85%.
The Dow Jones has opened 289 points in the red and the S&P 500 lost 42 points, both down 0.6%.
Biggest fallers on the Dow are Salesforce, Goldman Sachs, Caterpillar, Amazon, Microsoft and JPMorgan Chase – all down 1.8%-1.2%.
Nvidia and Visa are the only ones up more than 1%.
On the Nasdaq 100, the biggest fallers are semiconductor and technology stocks, led by Qualcomm, Monolithic Power Systems, Applied Materials, Micron Technology, Lam Research, KLA Corporation, NXP Semiconductors, Western Digital, ASML Holding, Strategy, PDD Holdings and Intel, down between 5.5% and 2%.
8.45am: US CPI rises to three-year high
US inflation last month was the highest in three years, due to rising energy, housing and food prices.
The US consumer price index was up 3.8% year on year in April, up from 3.26% the month before.
Month-on-month, CPI increased 0.6%, easing from the 0.9% monthly CPI reading in March.
Core CPI, which exclude food and energy, rose to 2.8% from 2.6%, while monthly core CPI climbed to 0.4%, the most in over a year, and overshooting market expectations of a 0.3% increase.
After the inflation data, stock futures have softened slightly as investors weighed the implications for interest rates and Treasury yields.
Nasdaq futures are now pointing to a 0.95% fall, with the S&P 500 down 0.43% and Dow futures still only just below flat.
8.15am: Nasdaq expected to lead losses
US stocks were set to open lower on Tuesday, with technology shares leading declines ahead of closely watched inflation data and another busy day for bond markets.
Nasdaq 100 futures were down 0.85%, with S&P 500 0.4% lower and Dow Jones futures less than 0.1% in the red.
This follows the Wall Street indices pushing to fresh record highs at the start of the week, when the S&P closed up 0.2% at 7,413 and the Nasdaq added 0.1% to finish at 26,274. The Dow rose 95 points to 49,704.
Investors are braced for April consumer price inflation figures due shortly after the opening bell, with markets also watching a $42 billion auction of 10-year Treasury notes later in the session.
The Treasury’s monthly budget statement and comments from Federal Reserve President Austan Goolsbee are also due.
Oil prices climbed again after Donald Trump said the Iran ceasefire was on “massive life support” and dismissed Tehran’s latest proposal as “a piece of garbage”. US crude futures rose almost 3% to above $101 a barrel.
European markets were weaker, with Frankfurt’s DAX down 1% and London’s FTSE 100 off 0.4%. In Asia, Tokyo’s Nikkei rose 0.5%, while South Korea’s Kospi fell 2.35% after a government proposal to introduce a “national dividend” linked to AI industry profits unsettled investors.
Analysts at Oxford Economics said Treasury yields remained closely tied to developments in the Middle East and oil markets, with investors balancing inflation risks against the possibility of Federal Reserve rate cuts later this year.
“The struggle for direction is likely to continue as long as negotiations between the US and Iran remain in limbo, with rates still tethered to the war’s path,” said analyst John Canavan.
“A larger increase in oil prices is possible if the war heats up again, but a more credible move to reopen the Strait of Hormuz would likely ignite a front-end-led bull steepening trade as markets begin to price in further Fed rate cuts.
“We expect the AI buildout, the passthrough of energy cost increases to other consumer prices, and lingering tariff effects to keep inflation higher this year, but the outlook should ease enough for the Fed to cut rates in December.”
Among individual stocks, GameStop was down 4% in pre-market trading after its bid for eBay was rejected as “neither credible nor attractive”.
On Holding jogged 2% lower despite the Swiss sportswear brand, which is backed by tennis legend Roger Federer, reporting record first-quarter sales and raising its profit margin outlook.
Quantum Computing soared 24% after first-quarter revenue of $3.7 million beat the Street’s estimate.