S&P 500 retreats from record after high inflation reading, drop in tech stocks

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 0.8% lower, and the Nasdaq Composite dropped 1.6%. The Dow Jones Industrial Average traded down 184 points, or 0.4%.

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.

With energy prices remaining 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.