Stocks Slide on Hot CPI, Iran War Jitters
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- S&P 500 and Nasdaq slipped from record highs on Tuesday — S&P 500 fell 0.16% to 7,400.96 and the Nasdaq dropped 0.71% to 26,088.20, while the Dow edged up 0.11% to 49,760.56 on healthcare strength
- April consumer prices rose faster than analysts expected, with the article attributing the stickiness to continued crude-supply disruption from the closure of the Strait of Hormuz amid the Iran war
- The Iran war, now in its 11th week, showed no near-term resolution: President Trump declared the truce "on life support" after Tehran rejected a U.S. proposal he called "garbage"
- The Federal Reserve saw newly confirmed board member Kevin Warsh take his seat the same day markets priced the odds of a December rate hike to 30.5%, up sharply from 21.5% on Monday
- GameStop dropped 3.5% after eBay rejected its $56 billion takeover bid, while Humana surged 7.7% on Bernstein's 36% price target hike and Hims & Hers Health tumbled 14.1% on a surprise Q1 loss
- The PHLX Semiconductor index fell 3% on the session even as the article noted it has soared 65.4% year-to-date on AI-related demand, and Zebra Technologies jumped 11.4% after raising its annual sales growth forecast
Why it matters: Rate-cut hopes have effectively flipped to rate-hike fears in a single session: CME FedWatch shows December hike odds jumping from 21.5% to 30.5% on Monday's hot CPI. With the Strait of Hormuz closed by the 11-week Iran war keeping crude supply tight, newly confirmed Fed governor Kevin Warsh inherits a stagflationary bind, and the tech-heavy Nasdaq — still near record highs — absorbed the brunt of the rotation out of risk.
