Nasdaq drops 0.7%, S&P 500 slips at open on inflation, crude price surge

Wall Street futures traded lower on Tuesday as hotter-than-expected inflation data and a sharp spike in crude oil prices rattled investor sentiment amid escalating tensions between the US and Iran.

The S&P 500 opened lower on Tuesday, with the broad market index falling 0.3% shortly after the opening bell. The Nasdaq Composite also declined 0.7%, while the Dow Jones Industrial Average traded around the flatline.

Earlier in the day, futures tied to the S&P 500 slipped 0.3%, while Nasdaq 100 futures fell

0.7%. Dow Jones Industrial Average futures, meanwhile, traded largely flat in premarket action.

The decline came as oil prices surged after US President Donald Trump criticised the month-old ceasefire between the US and Iran, calling it “unbelievably weak” and “on massive life support” after rejecting Tehran’s latest counterproposal to end the conflict.

Following the remarks, West Texas Intermediate crude futures jumped 2% to trade above $100 per barrel, while Brent crude climbed 3% to cross the $107 mark. The rally added to gains recorded in the previous session.

Iran’s latest counteroffer reportedly included demands for war reparations, complete sovereignty over the Strait of Hormuz, the release of frozen Iranian assets and the lifting of sanctions.

Meanwhile, fresh inflation data further dampened market mood. According to the Bureau of Labor Statistics, the consumer price index (CPI) rose 0.6% in April, taking the annual inflation rate to 3.8%, higher than economists’ expectations of 3.7%.

The reading marked the highest annual inflation level since May 2023. Excluding food and energy prices, core inflation rose 2.8% annually in April, indicating that price pressures continued to remain elevated despite tighter monetary conditions.

The data indicated that surging energy prices, fuelled by geopolitical tensions in the Middle East, were a key contributor to rising inflation.

Chipmaker Micron Technology also reversed gains in premarket trading, falling more than 2%. The stock had rallied sharply in recent sessions amid a broader memory-chip surge, gaining over 37% last week and more than 6% on Monday.

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