Key facts
- Major U.S. indexes fell Wednesday as technology stocks extended losses.
- Renewed U.S.-Iran tensions and high tech valuations contributed to market volatility.
- U.S. consumer prices rose 4.2% year-over-year in May, meeting forecasts.
- The Federal Reserve is expected to hold interest rates steady at its upcoming meeting.
- Nvidia, Broadcom, and Micron Technology shares declined, while Super Micro Computer tumbled on financing news.
- Energy shares gained as oil prices rose.
Wall Street's major indexes edged lower on Wednesday as technology stocks extended losses, while renewed tensions between the United States and Iran overshadowed a tame inflation reading. Volatility has picked up across stock markets in recent days, as investors contend with a widening array of risks, including high valuations in the tech sector, escalating Middle East tensions and expectations that the Federal Reserve may need to hike interest rates to curb inflation.
U.S. consumer prices increased 4.2% in the 12 months through May, the largest gain since April 2023, data showed, as the Middle East conflict raised the price of gasoline and other energy products. The pace of increase was, however, in line with forecasts. The Federal Reserve is widely expected to hold interest rates at its June policy meeting, with investors pricing in at least one 25 basis point rate hike by the end of the year.
Technology and AI stocks have borne the brunt of the selloff as investors priced in a tighter monetary policy and worried about stretched valuations in the sector. Nvidia, Broadcom and Micron Technology fell between 1% and 3.8%. Super Micro Computer tumbled 14.2% after announcing plans to raise $7 billion through a series of equity and equity-linked financing transactions. Six of 11 major S&P 500 sectors moved higher, with energy shares leading gains, as oil prices rose more than 1%.
At 09:37 a.m. ET, the Dow Jones Industrial Average fell 285.36 points, or 0.56%, to 50,586.75, the S&P 500 lost 33.44 points, or 0.45%, to 7,353.21 and the Nasdaq Composite lost 147.78 points, or 0.57%, to 25,531.04. U.S. President Donald Trump said Iran had taken too long to negotiate a deal and would now 'have to pay the price,' while Tehran said it would reassess diplomatic engagement with Washington after overnight tit-for-tat strikes. Shares of trucking companies XPO, J.B. Hunt and Old Dominion fell between 2.5% and 6.2% after Amazon announced expansion of its less-than-truckload freight services in the U.S.