Dow ends 50 points higher as Nasdaq slides on inflation, chip selloff

• Semiconductor stocks tumbled after massive rallies: Micron fell 3.6% after gaining 37% last week, Qualcomm dropped 11%, and AMD declined 2% following a 74% April surge, with the broader chip index down 3%
• April CPI rose 0.6% monthly and 3.9% annually, exceeding the 3.7% forecast, while core inflation remained elevated at 2.8%, reshaping Fed rate-cut expectations toward prolonged higher rates
• Oil prices extended gains with WTI crude rising 4.19% to $102.18 and Brent up 3.42% to $107.77 as US-Iran ceasefire hopes faded after Tehran demanded war reparations and full control of the Strait of Hormuz

Market Summary: Dow Gains as Chip Selloff Weighs on Nasdaq

Market Performance (May 12, 2026):

US stocks closed mixed with the Dow Jones rising 56.09 points (+0.11%) to 49,760.56, while the S&P 500 fell 0.16% to 7,400.96 and the Nasdaq dropped 0.71% to 26,088.20.

Semiconductor Sector Selloff:

Chip stocks retreated sharply after an extraordinary rally, with the broader semiconductor index falling 3%. Key casualties included:

• Micron Technology: -3.6% (after +37% last week and +53% over the past month)
• Qualcomm: -11%
• Advanced Micro Devices: -2% (following a 74% April surge)

Analysts attributed the decline to profit-taking after a nearly 70% six-week rally left valuations stretched amid renewed inflation concerns.

Inflation and Energy Pressures:

April's Consumer Price Index rose 0.6% month-over-month, pushing annual inflation to 3.7% versus the expected 3.7%. Core inflation remained elevated at 2.8%. Oil prices surged with WTI crude up 4.19% to $102.18/barrel and Brent gaining 3.42% to $107.77, driven by deteriorating US-Iran ceasefire negotiations.

Federal Reserve Implications:

Rising inflation and energy costs prompted markets to reassess rate-cut expectations, with traders now pricing in prolonged elevated rates or potential tightening in 2027. Treasury yields climbed in response.

Geopolitical Context:

President Trump rejected Iran's latest proposal demanding war reparations, sanctions relief, and sovereignty over the Strait of Hormuz, keeping oil markets on edge.

Other Movers:

Wendy's rose on potential take-private interest from Trian Fund Management, while Under Armour declined on weak guidance.

The market remains focused on whether AI-driven demand can offset macroeconomic risks from higher rates and energy costs.