Nasdaq and S&P 500 Fall as April Inflation Data Released

The release of hotter-than-expected April 2026 inflation data sent U.S. equity markets lower on May 12, with the Nasdaq Composite falling 0.7% and the S&P 500 declining 0.4% . The April Consumer Price Index came in at 3.8% year-over-year, above the 3.7% consensus estimate, while core CPI held at 2.8% — above the 2.7% expected — signaling that the Federal Reserve's progress toward its 2% target has stalled.

Compounding the inflation concern, U.S. crude oil rose roughly 3% to above $100 per barrel, fueled in part by geopolitical tensions in the Middle East. The dual pressure of sticky inflation and rising energy costs reinforced fears that the Fed will hold rates steady well into the second half of 2026. CME FedWatch data showed markets pricing near-zero probability of a June rate cut, with roughly a 30% chance of an additional hike by December 2026 .

Chip stocks pulled back alongside broader tech, reversing gains from the prior week's AI-driven rally. The market reaction underscores the fragile balance investors face: strong AI spending data has buoyed tech valuations, but any re-acceleration in inflation threatens the rate-cut narrative that underpins those elevated multiples. Traders will watch upcoming PCE data and Fed commentary closely for signals on the rate trajectory into year-end.

Related Stocks

• QCOM
• NVDA
• MU
• OKLO