US stocks fell on Tuesday as a rally in tech names halted and investors assessed the latest consumer inflation reading for insight into the impact of the Iran war on the economy.

The Nasdaq Composite (^IXIC) led losses, tumbling roughly 1.7%, while the S&P 500 (^GSPC) shed 0.8% after the two indexes notched record closing highs. The Dow Jones Industrial Average (^DJI), which includes fewer tech names, retreated by 0.3%.

Markets are weighing the Consumer Price Index (CPI) reading for April, which showed core price growth above expectations. Consumer inflation continued its rapid ascent amid the Strait of Hormuz blockade, which pressured global fuel and energy prices. Annual headline consumer inflation came in at 3.8%, slightly topping estimates to mark the metric’s largest increase since May 2023.

The debate going forward will be how rising inflation could sway the Federal Reserve’s view of monetary policy, especially in light of Friday’s stronger-than-expected April jobs report.

Also on Tuesday, President Trump will kick off a trip to China, where he will meet with Chinese President Xi Jinping. Trade and AI are expected to top the leaders’ agenda, and Trump has invited 16 top executives, including Tesla CEO Elon Musk and Apple CEO Tim Cook, to join him during the visit.

In the background, escalating tensions between the US and Iran kept investors on edge. Trump said the US-Iran ceasefire agreement between the two countries is on “massive life support” amid a stalemate over a potential peace plan.

Amid the impasse, oil prices continued to rise. West Texas Intermediate (CL=F) crude was up 3.3% to over $101 a barrel, while Brent crude futures (BZ=F) rose 3.3% to above $107 a barrel.

Chip stocks are having their worst day in seven months.

In a sharp reversal from the massive chip rally over the past couple of days that has driven stocks to record highs, the PHLX Semiconductor index (^SOX) is down roughly 5% on Tuesday.

Shares of AMD (AMD), Micron (MU), and Marvel (MRVL) saw mid-single-digit percentage declines as investor sentiment turned risk-off.

Qualcomm (QCOM) stock fell 12% and was having its worst day since 2020. Intel (INTC), which is up around 430% over the past year, declined 9% on the day.

Investors were likely taking some profits after a significant run-up. The downturn has only made a small dent in the index’s 2026 gains: The SOX remains up 4% over the past five days, 29% over the past month, and 60% since the beginning of the year.

April’s hotter-than-expected inflation data is likely to put the Federal Reserve on guard for creeping consumer prices and potentially leave the door open for interest rate hikes later this year.

Yahoo Finance’s Jennifer Schonberger reports:

According to CME FedWatch, markets on Tuesday morning were pricing in a nearly 98% chance that the Fed will hold rates steady at its next meeting in June and through most of 2026. But looking out to December, there’s now a nearly 30% chance of a rate hike.

Stephen Brown, chief North America economist for Capital Economics, said pressure on core inflation is “still a bit too strong for comfort, and the [Federal Open Market Committee] is likely to be concerned by renewed signs of food inflation accelerating, given the risk that higher gasoline and food prices together will further boost households’ inflation expectations.”

Members of the Fed who pushed to change language in the central bank’s policy statement, indicating the next interest rate move would be a cut, will likely push harder to shift the statement to the possibility that the next rate move could be an increase.

Read more here.

Copper (HG=F) prices surged by 1.2% on Tuesday, pushing the metal past $14,000 per ton, per Bloomberg data. They are nearing an all-time high as renewed demand from China and feedstock supply losses from the Persian Gulf have squeezed the metal.

The price action on Tuesday adds to a rally of nearly 14% since the beginning of the year and more than 40% over the past year. The industrial metal has become highly correlated with the tech sector on the back of copper demand for data centers, wiring, and other equipment.

In China, purchases have surged as the country’s EV transition and AI build-out have sent demand upward, with imports expected to rise in the second quarter of the year. State media in China recently reported that power grid investments, heavily reliant on copper, grew 37% in the first quarter compared with the same period a year earlier.

At the same time, the cessation of vessel traffic through the Strait of Hormuz in the Middle East has choked off global supplies of sulfur and sulfuric acid, which is used in copper production. Iran itself is a major exporter of refined copper.

Coinbase (COIN) and Strategy (MSTR) are taking a breather today — each down about 4%, while bitcoin (BTC-USD) cools by about 1%.

But since the March 30 market low, both stocks have trounced the world’s largest cryptocurrency. Bitcoin is up 23% since then, compared with a 35% gain for Coinbase and a 61% surge for Strategy.

The one-month chart shows the same pattern.

Coinbase and Strategy have tended to lead bitcoin both higher and lower, making the coin itself look almost stable by comparison.

That keeps the setup simple. Crypto bulls want Coinbase and Strategy to keep leading, but bitcoin still needs to break through $85,000. A rejection there would make the stocks’ leadership look more like a warning than confirmation.

Silver (SI=F) prices edged down on Tuesday morning, but they are up a whopping 17% from a week ago.

Silver’s surge over the past week comes as President Trump is set to embark on a trip to China to meet with President Xi Jinping. Some of the topics on the leaders’ agenda, such as artificial intelligence and tariffs, are tied to silver’s industrial applications, including electric vehicles and semiconductors.

Gold (GC=F) futures, meanwhile, declined on Tuesday and are up just 3% over the past week. The metal more closely tracks geopolitical uncertainty and has been volatile amid the ongoing war in Iran.

The US stock market opened in the red on Tuesday after April’s CPI reading showed core inflation grew faster than expected and the prior day’s tech rally lost its footing.

The Nasdaq Composite (^IXIC) saw the steepest loss at the opening bell, shedding 0.7%, while the S&P 500 (^GSPC) lost 0.4%. The Dow Jones Industrial Average (^DJI) fell by roughly 0.2% in a fully red opening for the major indexes.

Tuesday’s Consumer Price Index report showed annual headline consumer inflation came in at 3.8% as energy prices continue to rise, slightly topping estimates and marking the metric’s largest increase since May 2023. Core inflation, which excludes food and energy, rose 2.8% over the previous year.

Tuesday also marks the start of President Trump’s trip to Beijing for a long-awaited summit with Chinese leader Xi Jinping. Sixteen business executives, including Elon Musk, will be joining the president.

Real average hourly and weekly earnings, which measure inflation-adjusted worker pay, fell 0.3% and 0.2%, respectively, year-on-year in April, according to the Bureau of Labor Statistics — another sign that inflation is outpacing wage growth.

The yearly drops in real earnings mark a 180-degree turn from March, when the two metrics marked growth of 0.3% and 0.2% on hourly and weekly real earnings, respectively.

The decline in Americans' purchasing power comes amid a bevy of factors, including the war in Iran, that have increased consumer prices.

Consumer prices rose 0.6% in April over the previous month, and 3.8% year over year, while "core" prices — excluding food and energy — rose by 0.4% from the previous month and 2.8% over the previous year.

Inflation is no longer screaming. It is also not going away.

Headline Consumer Price Index inflation rose 3.8% year over year in April, the hottest reading since May 2023 and up from 2.4% as recently as January and February.

The chart tells the bigger story.

Before the pandemic, 3% inflation mostly looked like the top of the range. Since the 2022 shock faded, it has started to look more like support.

That does not mean the US is back in a 1970s-style inflation spiral. It does mean the old comfort zone has not returned.

Joe Brusuelas, chief economist at RSM, weighed in in a Yahoo Finance interview.

“The most important reading actually isn’t the CPI,” Brusuelas said. “It’s the real average hourly earnings, which are down 0.3% year over year.”

That turns the inflation story into a paycheck story. Prices are still rising fast enough to pressure real wages, even as the stock market has continued to climb.

Brusuelas said that the dynamic can keep equities “decoupled from the real economy,” with wage gains clustered in the market among people more likely to buy and invest in securities.

The market can look through 3%-plus inflation. Paychecks have a harder time doing that.

Consumer prices rose 0.6% in April over the previous month, according to data released by the Bureau of Labor Statistics on Tuesday morning, in line with expectations and below March's 0.9% increase.

The inflation measure rose 3.8% year over year, exceeding expectations of 3.7% and March's 3.3% reading. April’s year-over-year increase is the largest such jump since May 2023.

The "core" Consumer Price Index, which excludes the volatile food and energy categories, rose by 0.4% from the previous month and 2.8% over the previous year.

Both readings were above economists’ expectations of 0.3% month over month and 2.7% year over year. The monthly reading for core inflation also outperformed March's 0.2% monthly rise and 2.6% yearly increase.

Underneath the headline figures, the top-line energy price index rose 3.8% in April, with energy commodities — a category that includes gasoline and fuel oil — up 5.6%. Energy services, which include electricity and utility-supplied natural gas, rose 1.6%, balancing out to the top-line figure.

On an annual basis, energy prices are up 17.9%, with yearly increases on gasoline and fuel oil of 28.4% and 54.3%, respectively, pushing that figure north.

Elsewhere in the report, food prices rose 0.5% on the month, with those prices now up 3.2% year over year. While there hasn’t been much signal of this happening yet, economists have been warning that the loss of fertilizers from the Persian Gulf during the war in Iran is set to put upward pressure on food prices.

In another sign of the war’s impact, airline fares were up 20.7% year-on-year in April, according to the BLS, with a 6.3% monthly increase contributing.

Oil prices rose on Tuesday as tensions remained inflamed in the US after President Trump rejected Iran’s response to US proposals and said the ceasefire agreement between the countries was on “life support.”

Futures on Brent crude (BZ=F), the international benchmark, gained 3.2% to trade above $107 per barrel, while contracts on US benchmark WTI crude (CL=F) rose 3.4% to trade north of $101.

Investors spent Tuesday morning looking for any signs of relief or renewed aggression in the Gulf region after President Trump told reporters on Monday that the Iranian response received by the White House was “garbage,” putting the fragile ceasefire on “life support.”

In their response to an American proposal, Iran has demanded a lifting of the US naval blockade of the Strait of Hormuz, which has been choking off Iranian export revenues; sanctions relief; and some degree of control over traffic through the strait moving forward.

Kuwait on Tuesday said Iran’s Revolutionary Guard Corps had launched a skirmish against against an island within Kuwaiti territory, which the Kuwait Ministry of Foreign Affairs called a “flagrant violation of the sovereignty of the State of Kuwait.”

Traffic through the strait, a critical chokepoint for global energy flows, remained essentially halted Tuesday morning, adding to supply losses throughout the market. Saudi Aramco CEO Amin Nasser said Monday that the world is set to lose 100 million barrels of oil supply each day the war continues.

The US government on Tuesday released 53.3 million barrels of oil from its strategic petroleum reserve (SPR) — part of an agreement coordinated with the IEA to release 172 million barrels in total — as prices for crude and its derivatives have surged. Gasoline pump prices on Tuesday averaged $4.50 per gallon nationally.

Plug Power (PLUG): The stock popped 11% after reporting strong revenue growth and progress toward its goal of achieving profitability by Q4 2026.

Hims & Hers (HIMS): The telehealth platform reported a surprise first quarter loss on Monday afternoon as it pivots toward name-brand GLP-1 weight-loss drugs and away from cheaper copycat versions. The stock fell over 14% in premarket trading.

On Holding (ONON): The shoe company’s quarterly results beat Wall Street expectations, but the stock fell 4% in premarket trading. Co-CEO Caspar Coppetti told Yahoo Finance that the company’s “premium strategy [is] really working” and consumers are willing to pay full-price for its products.

Quantum Computing (QUBT): The stock surged 27% after the quantum computing company reported a major increase in revenue — from $39,000 a year ago to $3.69 million in Q1 — but also higher costs that weighed on profits. Its peer in the quantum space, D-Wave Quantum (QBTS) , also saw shares rise 1% after earnings.

On Tuesday, online marketplace eBay gave a response to GameStop’s (GME) bid to acquire the company.

“The Board, with the support of its independent advisors, has thoroughly reviewed your proposal and has determined to reject it,” board chair Paul Pressler wrote in a letter.

“We have concluded that your proposal is neither credible nor attractive,” Pressler wrote. “We have taken into account such factors as 1) eBay’s standalone prospects, 2) the uncertainty regarding your financing proposal, 3) the impact of your proposal on eBay’s long-term growth and profitability, 4) the leverage, operational risks, and leadership structure of a combined entity, 5) the resulting implications of these factors on valuation, and 6) GameStop’s governance and executive incentives.”

Last week, GameStop and its CEO, Ryan Cohen, launched an ambitious bid to take over eBay, which is four times the size of the video game retailer, for $55 billion.

Cohen said the deal would be financed in half cash, half stock, but an interview with CNBC raised questions about how GameStop would fund the acquisition.

President Trump has kicked off his high-stakes visit to China to meet his counterpart Xi Jinping. With AI and chips high on the agenda, Yahoo Finance’s Jared Blikre takes a look at China’s rally in tech stocks in today’s Chart of the Day.

He writes:

Chinese tech stocks have rallied back to a key level, just as the headlines are heating up.

The Invesco China Technology ETF (CQQQ) is pressing into a long-term downward-sloping trend line that starts at its February 2021 peak and captures both the 2025 and 2026 highs.

The ETF is still down nearly 50% from that peak, but a break above the yellow trend line in the chart below would likely generate momentum for the bulls.

Still, another technical hurdle looms just overhead: the $60 level around the 2025 high. A rally above that zone could force bearish bets to unwind, potentially leading to a short squeeze.

Read more here.

Wall Street is flashing signs of a stock market melt-up, or a rapid and unexpected rise in stock prices, notes Yahoo Finance’s Ines Ferré.

That’s led some strategists to draw uncomfortable parallels to the dot-com bubble of the late 1990s. But some see a firmer basis for the enthusiasm.

Ines reports:

Semiconductor stocks have been gapping up so fast that market watchers are reaching for the playbook from the run-up year to the dot-com crash.

"Since the 3/30/26 low and in particular over the last couple of weeks, it Feels Like 1999," Evercore ISI strategist Julian Emanuel and his team wrote in a note. "Relatives, friends, doctors, Uber drivers are all talking about AI/Tech stocks."

But Emanuel and his team point out that enthusiasm in 2026 is built on a firmer foundation than the dot-com era.

In 1999, “dot-com darlings” traded at a median price-to-earnings multiple of around 152 times, meaning investors paid $152 for every $1 of profit. Today's "AI Class of 2026" trades at roughly 39 times earnings.

"Valuations are high, but not Y2K extremes," Emanuel wrote.

Read more here.

Bloomberg reports:

Oil steadied as US President Donald Trump cast doubt over the ceasefire with Iran after rejecting Tehran’s latest peace offer, prolonging the effective closure of the vital Strait of Hormuz.

Brent (BZ=F) crude traded above $104 a barrel after advancing 2.9% in the previous session, while West Texas Intermediate (CL=F) was near $98. Trump told reporters in the Oval Office that the truce was on “massive life support” while deriding the Iranian response to his proposal to end the 10-week war.

A ceasefire has been in place since early April and has held even after a series of flareups in violence recently, including attacks on ships. The near-closure of the Strait of Hormuz has significantly disrupted flows of crude, natural gas and fuels to global customers, raising concerns about an inflation crisis.

Read more here.

Bloomberg reports:

GameStop Corp (GME). shares spiked and then quickly dropped in postmarket trading Monday after cryptic social media posts showed up and then disappeared from the social media account of Keith Gill, the financial influencer known as “Roaring Kitty,” who became prominent during the 2021 meme-stock craze.

GameStop’s stock jumped as much as 13% before paring those gains to trade lower after the posts — including one depicting a cat, and another with a picture of the online character Pepe the Frog wearing Roaring Kitty’s trademark red bandanna — were deleted around 5:40 p.m. in New York, less than an hour after they went up.

Shares of Chewy Inc., which was founded by GameStop’s current chief executive officer, Ryan Cohen, also rose as much as 3% before erasing the move.

Read more here.