Rising oil prices and a sudden halt for technology stocks are knocking Wall Street off its record highs on Tuesday.
The S&P 500 fell 0.9% from its all-time high set the day before. The Dow Jones Industrial Average was down 231 points, or 0.6%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was down 1.6% from its own record.
Some of the sharpest drops hit chip companies and stocks that had been on electric runs because of the artificial-intelligence
boom. Intel slumped 9.8% after its stock had more than tripled so far this year. Micron Technology dropped 7.4% after coming into the day with a gain of nearly 180% for the year to date, and CoreWeave sank 10.1% to cut into its gain of 60% for 2026.
The pullback for AI stocks began earlier in the day in Asia, where South Korea’s Kospi index sank 2.3% from its all-time high on worries that the government may redistribute windfall AI profits from companies to its citizens.
Also weighing on Wall Street was another rise in oil prices as the war with Iran threatens to drag on. The price for a barrel of Brent crude climbed 3.7% to $108.05 as a fragile U.S.-Iran ceasefire looks more tenuous. The war has essentially shut the Strait of Hormuz to oil tankers, keeping them stuck in the Persian Gulf instead of delivering crude to customers worldwide.
The resulting leap for crude oil prices, with Brent up from roughly $70 per barrel before the war, caused inflation in the United States to worsen last month by more than economists expected, according to a report released Tuesday. In another discouraging signal, price increases accelerated by more in April than economists expected even after excluding gasoline and food costs.
That could be a result of tariffs and bad weather also pushing prices higher, according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Treasury yields rose in the bond market following an initial zigzag, suggesting traders suspect the Federal Reserve will keep interest rates high to combat inflation.
The Fed has been keeping its cuts to interest rates on hold recently, as it waits to see how high inflation will go because of the war with Iran and the tariffs introduced by President Donald Trump. That’s because lower rates can worsen inflation at the same time that they give the economy a boost.
The yield on the 10-year Treasury rose to 4.45% from 4.42% late Monday and remains well above its 3.97% level from before the war.
Traders still largely expect the Fed to keep its main interest rate steady this year, but they're now betting on a better than 1-in-3 chance that it could hike rates by December, according to data from CME Group. Higher rates tend to push down on stock prices, while also slowing the economy.
Despite the climbs for Treasury yields, oil prices and uncertainty because of the Iran war, the U.S. stock market has remained remarkably resilient recently, in large part because companies keep producing bigger profits than analysts expected.
Zebra Technologies became the latest company in the S&P 500 to top analysts’ expectations for earnings, and its stock leaped 16.1%. The company, which helps customers digitize and automate their workflows with bar code scanners and other products, also gave a forecast for profit over the full year that topped analysts’ expectations.
But Under Armour sank 18.4% after reporting a worse loss for the latest quarter than analysts expected. CEO Kevin Plank said the company is continuing steps to “reset the business and restore the discipline required to operate as a best-in-class brand.”
Outside of earnings reports, GameStop fell 1.2% after eBay rejected a buyout offer from the much smaller company, calling it “neither credible nor attractive.” It highlighted uncertainty about how GameStop would raise the money to pull off the purchases, among other challenges for the deal, and eBay's stock added 0.2%.
Beazer Homes USA fell 2.5% after likewise rejecting an unsolicited buyout offer. It said that Dream Finders Homes has repeatedly undervalued it in its attempts to buy the homebuilder, including with its latest bid, which offered less than prior offers.
Dream Finders fell 11.5%.
In stock markets abroad, indexes mostly fell across Europe and Asia.
Besides South Korea’s tumble, losses of 1.6% for Germany’s DAX and 1.1% for France’s CAC 40 were some of the world’s sharpest.
Japan’s Nikkei 225 added 0.5%.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
