Stocks Pull Back as Hot Inflation Data Hits Chipmakers – US Market Wrap

US stocks fell as a selloff in high-flying semiconductor shares weighed on the market, while bonds also declined after inflation data showed the impact of energy disruptions linked to the war in Iran.

A stronger-than-expected rise in core consumer prices halted the equity rally, sending the S&P 500 down from a record high. The Nasdaq 100 fell nearly 1%, while a gauge of chipmakers dropped 3%. Renewed inflation concerns pushed Treasury yields higher, with traders increasing bets on a Federal Reserve rate hike in 2027. US crude climbed above $102 a barrel.

The recent rally from war-driven lows began to look stretched, especially in the technology names that had led the rebound. Chipmakers had surged nearly 70% in just six weeks, prompting expectations of a pullback as the Iran conflict continues to threaten growth while adding to inflation pressure.

US inflation accelerated in April as gasoline and grocery costs rose, outpacing wage growth and adding pressure on consumers. The consumer price index increased 3.8% from a year earlier, the fastest pace since 2023, while the core gauge excluding food and energy rose 2.8%.