Nasdaq Stocks Fall 1.2% After April CPI Hits 3.8%
US stocks fell on Tuesday, with the Nasdaq Composite tumbling roughly 1.2% after April CPI showed annual headline inflation at 3.8% and core inflation at 2.8%. The move hit the names that had carried the market to record closes, and it left traders reassessing how quickly the inflation path could ease.
Nasdaq Leads the Drop
1.2% was the Nasdaq Composite’s decline, while the S&P 500 shed 0.7% and the Dow Jones Industrial Average retreated 0.6%. The pullback followed record closing highs for the Nasdaq Composite and the S&P 500 before Tuesday’s slide, a reminder that leadership in the largest growth stocks had become thin after a strong run.
3.8% was the April annual headline inflation rate, the largest increase since May 2023. Core prices rose 2.8% from a year earlier, above expectations, and that combination gave markets less room to lean on the idea that price pressure was fading quickly. For stock holders, the immediate effect was a reset in rate-sensitive names that had benefited most from lower-inflation bets.
Inflation And Rates Pressure
0.3% and 0.2% were the year-on-year drops in real average hourly earnings and real average weekly earnings in April. Those declines show that wage gains were being eaten by inflation again, leaving households with less purchasing power even after the stronger-than-expected Friday jobs report had suggested the labor market was still firm.
3.3% was the jump in West Texas Intermediate crude to over $101 a barrel on Tuesday morning, while Brent crude futures also rose 3.3% to above $107 a barrel. Oil’s rise added another layer to the inflation read-through, and silver was up 17% from a week ago while gold futures slipped on Tuesday and were up just 3% over the past week.
Trump, Xi, And Energy
16 top executives were set to accompany President Donald Trump as he began a trip to China on Tuesday and met with Chinese President Xi Jinping. Trump also said the US-Iran ceasefire agreement was on “massive life support,” as a stalemate over a potential peace plan fed concern that energy markets could stay under pressure.
If inflation stays above expectations while oil keeps climbing, the market is likely to keep testing the same trade: fewer rate cuts priced into stocks, more sensitivity in tech, and heavier scrutiny of every new price report. For traders who spent the previous sessions pushing indexes to records, Tuesday was a direct reminder that the inflation fight is still shaping the tape.
