US close: S&P 500, Nasdaq sink to five-week low on inflation, geopolitical fears

(Sharecast News) - US stocks plummeted on Wednesday, with the Dow and Nasdaq falling nearly 2% apiece, as heightened geopolitical conflict in the Middle East and concerns about rising inflationary pressures hammered risk appetite.

The Dow sank 1.87% to 49,918.78, the first close below the 50,000 mark since 19 May and the steepest one-day decline of 2026 so far.

The S&P 500 fell 1.62% to 7,266.99, while the Nasdaq dropped 1.98% to 26,169.50, with both settling at their lowest levels since the first week of May.

Fading hopes of a peace deal between the US and Iran fuelled a rise in oil prices, after Washington carried out what it described as "selfdefence strikes" against the Gulf nation. Brent crude gained 1,8% to $93.10 a barrel.

The US launched strikes against Iran in response to the downing of a US Army Apache helicopter a day earlier, according to US Central Command. Donald Trump had accused Iran of shooting down the aircraft as it patrolled over the Strait of Hormuz.

Tehran has not claimed responsibility, though officials warned that foreign forces operating near Iranian territory face inherent risks from accidents, human error or crossfire.

Also in focus was the US consumer price index for May, which showed that the annual rate of inflation jumped to 4.2% from 3.8% in April, its first reading above 4% since May 2023.

Energy remained the main driver, with the index up 3.9% on the month and accounting for more than 60% of the overall rise. However, the core CPI, which strips out volatile food and energy prices, still rose to 2.9% year-on-year from 2.8%.

"US inflation may have broadly been in line with expectations, but CPI coming in above 4% in May for the first time in three years has concentrated minds on the inflationary shock created by the conflict in the Middle East," sad AJ Bell's head of financial analysis Danni Hewson.

Elsewhere on the macro front, US mortgage applications rose in the first week of June, according to the Mortgage Bankers Association, with overall volumes increasing by 10.8% week-on-week. The increase followed a 2.5% drop in the prior week and snapped a three-week run of decreases. It was also the highest rise since late February and came despite rising benchmark mortgage rates.

Tech stocks tank

Super Micro Computer lost around a third of its market value after the AI server maker announced plans to raise $7bn in equity-related financing, overshadowing a surge in recent orders for its AI systems. It said it had received about $39bn of AI server orders from more than 20 customers, reflecting continued strong demand for systems fitted with Nvidia chips.

Others in the AI and chip spaces were also out of favour as a decline in risk appetite weighed heavily on stocks that have driven much of the market's year-to-date gains, amid renewed concerns about stretched valuations across both sectors. Heavyweights Nvidia, Broadcom, AMD and Micron Technology all fell sharply.

Another sector seeing heavy losses was transport and logistics, after Amazon announced an expansion in its less-than-truckload freight service, hitting shares of legacy carriers Old Dominion Freight, XPO, Saia and FedEx Freight Holding.

Dow Jones - Risers

Dow Chemical Co. (DOW) $34.24 3.07%

Coca-Cola Co. (KO) $83.59 2.77%

Verizon Communications Inc. (VZ) $46.95 2.56%

Chevron Corp. (CVX) $189.80 1.63%

Travelers Company Inc. (TRV) $303.36 1.04%

Johnson & Johnson (JNJ) $238.49 0.63%

3M Co. (MMM) $156.85 0.29%

Procter & Gamble Co. (PG) $149.05 0.26%

McDonald's Corp. (MCD) $282.52 0.10%

Walmart Inc. (WMT) $0.00 0.00%

Dow Jones - Fallers

Caterpillar Inc. (CAT) $856.16 -6.40%

Intel Corp. (INTC) $107.04 -4.91%

Cisco Systems Inc. (CSCO) $118.80 -3.27%

Goldman Sachs Group Inc. (GS) $1,001.29 -2.98%

Amgen Inc. (AMGN) $337.73 -2.91%

Microsoft Corp. (MSFT) $397.36 -2.79%

Apple Inc. (AAPL) $291.58 -2.60%

Boeing Co. (BA) $209.00 -2.57%

Salesforce.Com Inc. (CRM) $170.92 -2.53%

International Business Machines Corporation (CDI) (IBM) $272.36 -1.85%

S&P 500 - Risers

Devon Energy Corp. (DVN) $46.60 5.74%

Charter Communications Inc. (CHTR) $137.79 4.89%

Macy's Inc. (M) $23.16 4.42%

J. M. Smucker Co. (SJM) $117.05 4.15%

CME Group Inc. (CME) $263.80 4.01%

Helmerich & Payne Inc. (HP) $39.37 3.85%

Mondelez International Inc. (MDLZ) $64.18 3.62%

ONEOK Inc. (OKE) $90.57 3.17%

Unum Group (UNM) $90.68 3.05%

Sba Communications Corp. (SBAC) $207.33 2.89%

S&P 500 - Fallers

QUALCOMM Inc. (QCOM) $191.20 -9.24%

Coterra Energy Inc. (CTRA) $32.56 -8.62%

Micron Technology Inc. (MU) $891.88 -8.36%

Advanced Micro Devices Inc. (AMD) $452.40 -8.10%

Ipg Photonics Corp. (IPGP) $104.07 -8.00%

Alaska Air Group Inc. (ALK) $41.68 -7.64%

Seagate Technology Plc (STX) $815.99 -7.59%

Western Digital Corp. (WDC) $490.09 -7.54%

NRG Energy Inc. (NRG) $120.65 -7.16%

Broadcom Inc. (AVGO) $372.10 -7.03%