U.S. equities tumbled from record highs Tuesday after a hotter-than-expected April inflation report consolidated worries that the Federal Reserve will not cut interest rates this year, with the selloff compounded by surging oil prices and a fresh leg higher in long-end Treasury yields.
Headline Consumer Price Index accelerated to 3.8% year-over-year in April from 3.3% prior, the highest reading since March 2023 and above the 3.7% consensus, driven largely by gasoline prices.
Core inflation also surprised to the upside at 2.8%, leaving the Fed widely expected to keep rates on hold throughout the year, while markets currently price in a roughly 30% probability of a 25-basis-point rate hike in December.
The 10-year Treasury yield jumped about 4 basis points to 4.46%, nearing March highs, while the 30-year yield breached the psychologically important 5.02% level and the 2-year traded near 4.0%.
By Midday Tuesday…
Across U.S. equity markets, losses were broad-based but concentrated in technology and small caps. The Nasdaq 100 led the way lower as the semiconductor complex collapsed.
The S&P 500 fell 0.9% to 7,347, while the Nasdaq 100 sank 2.1% to 28,699 as the AI-infrastructure trade unraveled.
President Donald Trump criticized an Iranian counteroffer to end the war, and said the month-long ceasefire is “unbelievably weak”.
WTI crude climbed to $101.43 a barrel by midday, up 3.4%, while Brent rose 3.3% to $107.60.
Gold pulled back 1.4% to $4,671 per troy ounce as a stronger dollar and surging real rates trumped haven demand, with the SPDR Gold Shares (NYSE:GLD) tracking the move lower.
Tuesday’s Performance In Major US Indices
| Index | Last | % Change |
|---|---|---|
| S&P 500 | 7,347.36 | -0.9% |
| Dow Jones | 49,557.51 | -0.3% |
| Nasdaq 100 | 28,699.04 | -2.1% |
| Russell 2000 | 2,804.90 | -2.3% |
According to the Benzinga Pro platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) fell 0.9%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) slipped 0.3%.
- The Invesco QQQ Trust (NASDAQ:QQQ) dropped 2.1%.
- The iShares Russell 2000 ETF (NYSE:IWM) sank 2.3%.
South Korea’s ‘AI Citizen Dividend’ Hammers Memory Rally
Memory and chip equipment names led the carnage as South Korea mulled establishing a universal dividend funded by the recent surge in AI infrastructure stocks, threatening to claw back gains in the sector.
Sandisk Corp. (NASDAQ:SNDK) tumbled 9.0%, Intel Corp. (NASDAQ:INTC) slid 8.9%, Micron Technology Inc. (NASDAQ:MU) dropped 8.6%, and Western Digital Corp. (NASDAQ:WDC) fell 7.6%.
Chip equipment names followed lower with Applied Materials Inc. (NASDAQ:AMAT) down 5.5%, Lam Research Corp. (NASDAQ:LRCX) off 5.4%, ASML Holding N.V. (NASDAQ:ASML) down 5.3% and Broadcom Inc. (NASDAQ:AVGO) lower by 3.6%.
QUALCOMM Incorporated (NASDAQ:QCOM) sank 13% on a continuation of the post-earnings slide.
Tuesday’s Earnings Movers
- Zebra Technologies Corp. (NASDAQ:ZBRA) jumped 18% to lead the Russell 1000 after first-quarter adjusted EPS of $4.75 crushed the $4.33 consensus and revenue rose 14% to $1.5 billion. Management raised full-year adjusted EPS guidance to the $18.50 midpoint, a 2.8% bump that ratified a constructive read on enterprise mobile-computing demand.
- The Wendy’s Company (NASDAQ:WEN) ripped 15% after Q1 adjusted EPS of about $0.12 on revenue of $540.6 million beat consensus, despite global systemwide sales falling 5.5% and same-restaurant sales dropping 6.8%. The catalyst was a newly inked franchise agreement to develop up to 1,000 restaurants in China, a strategic pivot investors rewarded despite the soft headline comp.
- Ralliant Corporation (NYSE:RAL) surged 14% after reporting first-quarter results and raising full-year guidance, the post-spinoff industrial name’s first definitive proof point to public-market investors.
- Aramark (NYSE:ARMK) climbed about 10% after second-quarter adjusted EPS of 49 cents beat the 47-cent consensus on revenue of $4.91 billion vs. $4.75 billion expected, with management taking fiscal 2026 organic revenue growth to the high end of the prior 7-9% range.
On The Downside
- ZoomInfo Technologies Inc. (NASDAQ:GTM) collapsed 33% after the data-intelligence firm slashed full-year 2026 revenue guidance to $1.185-$1.205 billion from $1.247-$1.267 billion previously, well below the $1.272 billion consensus, despite Q1 EPS of $0.28 beating the $0.18 estimate.
- Under Armour Inc. (NYSE:UAA) tumbled 17% after Q4 fiscal 2026 EPS came in at -$0.03 versus -$0.02 expected on $1.17 billion revenue, with North America sales down 7% and fiscal 2027 guidance pointing to continued revenue declines and weak profit.
- AST SpaceMobile Inc. (NASDAQ:ASTS) fell 13% after first-quarter revenue of $14.7 million missed the $39.0 million consensus by a wide margin, with management flagging a $155-$160 million asset write-off in Q2 tied to a satellite loss.
- AECOM (NYSE:ACM) dropped 11% as fiscal Q2 revenue of $3.80 billion missed Street estimates and was flat year-over-year, with the top-line shortfall overshadowing a $1.59 adjusted EPS beat and a raised FY26 outlook.
- Elsewhere, Hims & Hers Health Inc. (NYSE:HIMS) plunged 15% after Q1 earnings missed expectations.
Image: Shutterstock
Recent Comments