Stock Market Today: Nasdaq, S&P 500 Fall as CPI Inflation Rises, Chip Stocks Drop

💡 The Nasdaq and S&P 500 fell on Wednesday as CPI inflation rose, with chip stocks leading the decline.

The Nasdaq and S&P 500 fell on Wednesday as CPI inflation rose, with chip stocks leading the decline. The latest inflation data showed that prices rose 0.4% in March, beating expectations of a 0.3% increase. The Federal Reserve has been closely monitoring inflation rates, and a sustained increase could lead to higher interest rates.

Fed Signals Rates Higher for Longer

The Federal Reserve delivered a hawkish surprise on Wednesday, signaling that interest rate cuts remain further away than markets had hoped. Fed Chair Jerome Powell told reporters that the central bank needs "greater confidence" that inflation is sustainably declining before it will consider easing policy. The 10-year Treasury yield surged to its highest level since October 2023, while $TLT fell sharply as bond traders repriced the timing of the first cut from March to June.

Chip Stocks Lead the Decline

Chip stocks were among the hardest hit, with $NVDA falling 3.5% and $TXN dropping 2.7%. The sector has been under pressure in recent weeks due to concerns over slowing demand and supply chain disruptions. The decline in chip stocks was exacerbated by a report from the Semiconductor Industry Association, which showed that global chip sales fell 14.4% in February.

What It Means for Investors