* Indexes down: Dow 0.60%, S&P 500 0.57%, Nasdaq 0.92%

* Zebra Technologies ( ZBRA ) jumps on annual sales growth

forecast raise

* US consumer prices increase further in April

(Updates after market open)

By Ragini Mathur and Utkarsh Hathi

May 12 (Reuters) - Wall Street's main indexes edged

lower on Tuesday, with the S&P 500 and the Nasdaq pulling back

from record highs after a hotter-than-expected inflation report

and fading hopes for a swift resolution to the Middle East

conflict.

U.S. consumer prices rose at a brisk pace for a second

straight month in April, pushing annual inflation to its highest

level in nearly three years and reinforcing expectations that

the Federal Reserve will keep interest rates unchanged for

longer.

The Consumer Price Index increased 3.8% last month on an

annual basis, while economists polled by Reuters had expected a

3.7% rise.

"We believe the financial markets have been a little slow to

appreciate the economic damage that is building with higher

prices, oil prices, raw materials, all those things that could

accelerate global inflation," said Doug Beath, global equity

strategist, Wells Fargo Investment Institute.

"April had the highest S&P 500 returns since 2020. Obviously,

earnings continue to exceed expectations. But I do think even

though it (CPI)is a little bit higher than expected, it could be

more important because of the fact the negotiations are still in

limbo."

Although a strong earnings season has supported sentiment,

stalled negotiations between Washington and Tehran remain a

concern for market watchers as surging oil prices fuel worries

of higher inflation.

President Donald Trump said a ceasefire with Iran was "on

life support" after Tehran rejected a U.S. proposal to end the

conflict, keeping oil prices elevated as the key Strait of

Hormuz shipping route remained closed.

Ahead of the war, traders had expected two rate cuts, per

CME Group's FedWatch Tool, but currently expect the Federal

Reserve to keep interest rates steady through the end of the

year.

With the first-quarter earnings season drawing to a close,

investors are turning to macroeconomic cues. Producer prices and

retail sales data are also due this week.

At 10:00 a.m. ET, the Dow Jones Industrial Average

fell 297.98 points, or 0.60%, to 49,406.49, the S&P 500

lost 43.98 points, or 0.57%, to 7,368.86 and the Nasdaq

Composite lost 240.76 points, or 0.92%, to 26,038.27.

Eight of the eleven main S&P 500 sectors traded in the red,

with consumer discretionary stocks leading losses,

down 1.1%.

All three major U.S. indexes advanced on Monday, with the

S&P 500 and Nasdaq closing at record highs,

supported by optimism around artificial intelligence and

corporate earnings.

But the technology sector fell 0.9% on Tuesday.

Chip stocks were mixed, with Nvidia ( NVDA ) rising 1.7%, while

Intel ( INTC ) shares eased 2% after climbing more than 17% in

the previous two sessions. Qualcomm ( QCOM ) dropped 6% after

hitting a record high in the previous session.

Among other movers, Zebra Technologies ( ZBRA ) jumped 15%

after the barcode scanner maker raised its annual sales growth

forecast, betting on robust demand for its products that help

automate manufacturing workflows.

Hims & Hers Health ( HIMS ) tumbled 12.3% after the

telehealth firm missed Wall Street estimates for first-quarter

revenue and posted a surprise loss.

Venture Global ( VG ) rose 4.7% after the LNG exporter

raised its annual adjusted core profit forecast.

Declining issues outnumbered advancers by a 3.14-to-1 ratio

on the NYSE, and by a 2.69-to-1 ratio on the Nasdaq.

The S&P 500 posted 8 new 52-week highs and 19 new lows while

the Nasdaq Composite recorded 32 new highs and 81 new lows.

(Reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru;

Editing by Devika Syamnath)