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US Equity Indexes Fall Amid Hot Inflation Print, Deadlocked Iran Peace Efforts
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US Equity Indexes Fall Amid Hot Inflation Print, Deadlocked Iran Peace Efforts
May 12, 2026 10:39 AM

01:19 PM EDT, 05/12/2026 (MT Newswires) -- US equity indexes dropped in Tuesday's midday trading as a hotter-than-anticipated inflation print amid soaring gas prices hit growth sectors, while a stalemate continued in Iran peace talks.

The Nasdaq slumped 2% to 25,753.1, with the S&P 500 down 1% to 7,340.4 and the Dow Jones Industrial Average lower by 0.2% to 49,604.2.

The US seasonally adjusted consumer price index jumped by 3.8% in April from 3.3% in the prior month, according to data released Tuesday by the Bureau of Labor Statistics, compared with the 3.7% consensus. Core CPI, which excludes food and energy prices, climbed by 2.8% from 2.6%, versus expectations for 2.7%.

The CPI increased 0.6% in April, as expected, following a 0.9% increase in the previous month. Core CPI gained 0.4%, higher than the consensus estimate for a 0.3% increase. Core CPI rose by 0.2% in March.

Gasoline prices rose a further 5.4% in April following a gain of more than 21% in March because of the ongoing closure of the Strait of Hormuz, the choke point for about a fifth of global crude oil flows, according to a Jefferies note.

Federal Reserve Bank of Chicago President Austan Goolsbee said inflation readings show pervasive price pressures in the US economy and may even indicate overheating, Bloomberg cited NPR.

"If you look at the components that are not energy, like services, if that is an indication that the underlying economy is overheating then the Fed has got to be thinking about how do we break the chain of escalating inflation," Goolsbee was cited as saying Tuesday.

The probability of a 25 basis-point increase in interest rates to 3.75% to 4% jumped for each of the last three meetings of this year out of the remaining five, according to data compiled by the CME FedWatch tool. The likelihood of an increase in September is in high single digits, over a fifth in October, and almost a third in December.

US Treasury yields jumped, with the 10-year up 4.7 basis points to 4.46%, the highest since about July. The two-year rate jumped 5.1 basis points to almost 4%, the strongest since June.

In post-midday trading, technology and consumer discretionary sectors led the decliners in a broadly negative tape. Healthcare and consumer staples were among the gainers.

Meanwhile, oil prices jumped as a faltering ceasefire between the US and Iran kept the Strait of Hormuz closed, continuing the largest-ever energy supply shock.

West Texas Intermediate crude oil futures surged 3.9% to $101.88, and Brent crude futures increased 3.4% to $107.70.

"Oil prices climbed ... as the global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz," Saxo Bank wrote in a note. "The move followed Trump casting doubt over a ceasefire with Israel signalling the war is not over."

In precious metals, gold futures slid 1.1% to $4,675.3, and silver futures declined 1.2% to $84.92 amid concerns that higher crude oil prices will boost inflationary pressures.

In company news, eBay ( EBAY ) rejected GameStop's ( GME ) proposal to acquire the e-commerce company for about $55.5 billion.

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