US sharemarkets closed mixed on Tuesday as investors reacted to stronger-than-expected inflation data and another sharp rise in oil prices linked to the Iran war.
The S&P 500 slipped 0.16% to close at 7,400.96, while the Nasdaq Composite fell 0.71% to 26,088.20. The Dow Jones Industrial Average rose 56.09 points, or 0.11%, to finish at 49,760.56.
Technology stocks weighed on the broader market after leading recent gains. Micron Technology fell 3.6%, reversing course after surging more than 37% last week amid strong momentum in memory-chip stocks. Advanced Micro Devices lost 2%, while Qualcomm dropped 11%.
The pullback came as investors reassessed valuations across artificial intelligence-linked companies following a sustained rally in semiconductor and technology names over recent months.
Markets also absorbed April inflation data, with the consumer price index rising 0.6% for the month and lifting the annual inflation rate to 3.8%, according to the Bureau of Labor Statistics. Economists had expected annual inflation of 3.7%.
The reading marked the highest annual inflation rate since May 2023 and reinforced concerns that elevated energy prices tied to the Iran war could place further pressure on consumers and delay expectations for interest rate relief.
Oil prices surged as investors weighed the implications of escalating tensions between the US and Iran and the growing risk of prolonged disruption around the Strait of Hormuz.
US West Texas Intermediate crude rose 4.19% to settle at US$102.18 a barrel, while Brent crude climbed 3.42% to US$107.77.
Australian Market Outlook
Australian shares are expected to edge lower after profit-taking in US semiconductor stocks and renewed expectations that US interest rates may remain higher for longer following the latest inflation data.
S&P/ASX 200 futures are down 10 points, or 0.1%, to 8,675, with weakness expected across local technology stocks after sharp declines in major US chipmakers overnight.
Locally, investor attention will turn to Commonwealth Bank’s third-quarter trading update, while results are also due from AngloGold Ashanti. Accent Group is scheduled to hold an investor day.
On the economic front, the first-quarter wage price index will be released at 11.30am AEST and is expected to provide further insight into labour market pressures and the outlook for domestic interest rates.
