Wall Street’s record-setting run came to an abrupt halt Tuesday, as a wave of selling in high-flying AI chip stocks and a fresh surge in oil prices combined to interrupt the rally.
The S&P 500 slipped 11.88 points, or 0.2%, to 7,400.96, retreating from the all-time high set a day earlier. The Dow Jones Industrial Average eked out a 56-point gain, closing at 49,760.56, while the technology-heavy Nasdaq composite tumbled 185.92 points, or 0.7%, to 26,088.20.
The sharpest declines were concentrated among semiconductor and AI-oriented companies that had posted outsized gains earlier in the year. Intel fell 6.8% after its stock had more than tripled in 2026. Micron Technology dropped 3.6%, paring a year-to-date gain of nearly 180%. CoreWeave, a provider of AI cloud infrastructure, lost 6.1%, trimming its 2026 advance to roughly 60%. The sell-off began overnight in Asia, where South Korea’s Kospi sank 2.3% from its record after investors worried the government might try to redistribute windfall AI profits.
“That could be a result of tariffs and bad weather also pushing prices higher,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Oil prices added to the pressure. Brent crude, the international benchmark, rose 3.4% to settle at $107.77 a barrel as a fragile U.S.-Iran ceasefire appeared increasingly tenuous. The war has effectively shut the Strait of Hormuz, trapping oil tankers in the Persian Gulf and preventing crude from reaching global customers. Before the war began, Brent traded around $70.
The energy-price jump fed directly into a discouraging inflation report released Tuesday. U.S. consumer prices rose more than economists had expected in April, with the headline figure accelerating beyond forecasts. Even after stripping out volatile food and energy costs, the core rate increased by more than anticipated, suggesting that price pressures are broadening. The report raised concerns that inflation may be more persistent than the Federal Reserve had hoped.
Treasury yields ticked higher, with the 10-year note climbing to 4.45% from 4.42% late Monday, well above its 3.97% level before the Iran conflict began. Higher yields indicate bond investors are pricing in a greater chance that the central bank will keep borrowing costs elevated — or even raise them — to combat inflation. According to CME Group data, traders still overwhelmingly expect the Fed to hold its main interest rate steady this year, but they now assign a more than one-in-three probability to a rate hike by December. Such a move would weigh on stock valuations and could slow the economy further.
Still, the U.S. stock market has shown remarkable resilience in recent months, largely because corporate earnings have repeatedly topped analysts’ estimates. Zebra Technologies, a company that helps businesses digitize workflows, became the latest S&P 500 member to beat expectations. Its stock surged 11.4% after it also issued an upbeat full-year profit forecast.
But other earnings reports disappointed. Under Armour sank 17% after reporting a larger quarterly loss than analysts had projected. CEO Kevin Plank said the company was continuing efforts to “reset the business and restore the discipline required to operate as a best-in-class brand.”
Elsewhere, GameStop fell 3.5% after eBay rejected an unsolicited buyout offer from the video-game retailer, calling it “neither credible nor attractive.” eBay highlighted uncertainty about how GameStop would finance a purchase, and its own stock rose 2.1%. Beazer Homes USA lost 7.3% after the homebuilder rebuffed a takeover bid from Dream Finders Homes, which Beazer said had repeatedly undervalued the company — the latest offer was lower than previous approaches. Dream Finders closed down 13.4%.
International markets broadly fell. Germany’s DAX declined 1.6%, France’s CAC 40 lost 0.9%, and most Asian indexes ended lower. Japan’s Nikkei 225 was an outlier, adding 0.5%.