NASDAQ 100 futures experienced a decline of about 1% following the release of US inflation data for April, which was slightly higher than Wall Street's expectations. The Consumer Price Index (CPI) increased by 3.8% year-over-year and 0.6% month-over-month. While these figures were near consensus, they provided enough of a surprise to unsettle an already jittery market.
The reported headline CPI outpaced the predicted 3.7%, marking the highest annual figure since May 2023. In addition, the core CPI, which excludes food and energy prices, rose to 2.8% year-over-year, surpassing the expected 2.7% and reaching its peak since September 2025.
#How Are Global Markets Being Affected?
This selloff has not solely impacted the NASDAQ 100; S&P 500 futures have also dropped approximately 0.4%. The Dow futures have retreated slightly by 0.1%. The pronounced underperformance of the tech-heavy NASDAQ is primarily due to the rise in inflation expectations, which pose a direct threat to the growth strategy of investing in technology stocks. This strategy relies on lower interest rates to sustain favorable valuations.
European markets are reflecting similar trends as well. Germany's DAX index fell 1.22%, the Euro Stoxx 50 decreased by 1.08%, France’s CAC dropped 0.72%, and the UK’s FTSE 100 declined by 0.41%.
#What Is Causing the Surprise in Inflation?
The 3.8% headline CPI indicates a notable acceleration from recent trends. It appears that rising energy prices, influenced by geopolitical tensions in areas like the Strait of Hormuz, are impacting broader consumer pricing.
The core CPI figure of 2.8% warrants particular attention since the Federal Reserve carefully monitors core inflation to discern underlying price trends without the volatility of food and energy sectors. The uptick to 2.8% signifies a troubling direction, marking the highest core inflation figure since September 2025.
#Why Do Tech Valuations Matter Right Now?
For technology investors, the implications of this inflation report are particularly unsettling. Major stock market indices had recently reached record highs, driven by optimism surrounding artificial intelligence and robust corporate profits from leading companies.
Investor Michael Burry, known for predicting the 2008 financial crisis, has been sounding alarms about the possibility of substantial declines in the NASDAQ 100, citing the overvaluation of tech stocks. Continued troubling inflation data could keep the Federal Reserve from taking necessary actions or, even worse, could lead to delays in anticipated rate cuts, reinforcing concerns among investors.