Tech stocks fall ahead of US inflation reading

Stocks pushed lower, with chipmakers leading losses in the S&P 500 and the Nasdaq 100 dropping 1%.

A slide in big tech and higher energy prices weighed on Wall Street ahead of key US inflation data that will help shape up the outlook for the Federal Reserve’s next steps.

Stocks pushed lower, with chipmakers leading losses in the S&P 500 and the Nasdaq 100 dropping 1%. Nvidia shares, which have more than tripled this year amid the artificial intelligence frenzy, slipped 4%. Megacaps Tesla, Amazon, and Meta Platforms were all down. A surge in European wholesale gas prices and an advance in the global price of crude oil added to concern about further price pressures. 

“Markets are vulnerable to a period of consolidation,” said Mark Hackett, chief of investment research at Nationwide. “The rate environment is a headwind. Investors are increasingly concerned that the conservative positioning of institutional investors for much of the past year has shifted to aggressively long,” he said.

For now, traders decided to take some chips off the table ahead of the US consumer price index. The report is expected to show that inflation increased at a 3.3% annual pace in July, marking the first acceleration since June 2022, according to the median forecast of economists surveyed by Bloomberg. The core measure — which strips out volatile food and energy prices — is expected to ease slightly to 4.7%.

Expectations for CPI have cooled relative to the last couple of reports, according to a survey conducted by 22V Research. US investors are more ambivalent following a string of good releases. 

Bloomberg