The S&P 500 and Nasdaq ended lower on Tuesday as investors turned cautious following stronger-than-expected US inflation data and escalating concerns over the Iran conflict, while the Dow Jones Industrial Average managed a slight gain supported by healthcare stocks.
The Nasdaq fell 0.71% to close at 26,088.20, dragged lower by weakness in technology counters and semiconductor stocks. The S&P 500 slipped 0.16% to 7,400.96, while the Dow added 56.09 points, or 0.11%, to finish at 49,760.56.
Investor sentiment weakened after fresh inflation data showed consumer prices rose faster than expected in April, fuelled partly by elevated oil prices linked to ongoing disruptions around the Strait of Hormuz. Concerns also grew after US President Donald Trump reportedly said the ceasefire proposal involving Iran was “on life support”, dimming hopes of a near-term resolution to the conflict.
Technology shares led the decline, with the PHLX Semiconductor Index tumbling 3%, although the sector remains up more than 65% year to date amid continued enthusiasm surrounding artificial intelligence-related stocks.
Healthcare counters provided some support to the broader market. Humana surged 7.7% after Bernstein raised its price target on the insurer by 36%.
Elsewhere, GameStop slid 3.5% after eBay rejected its reported US$56 billion takeover proposal. Zebra Technologies jumped 11.4% after raising its annual sales growth forecast, citing strong demand for automation products.
Markets also increasingly believe the US Federal Reserve may need to keep rates higher for longer. According to CME FedWatch data cited by Reuters, traders are now pricing in a 30.5% chance of a 25-basis-point rate hike by December, up from 21.5% a day earlier.
Investors are also watching Trump’s upcoming visit to Beijing, where discussions are expected to include tariffs, trade tensions, Taiwan and China’s potential role in Middle East negotiations.
