NASDAQ 100 futures dropped roughly 1% after US April inflation data came in slightly above what Wall Street was expecting. The Consumer Price Index rose 3.8% year-over-year and 0.6% month-over-month, numbers that looked close to consensus but carried just enough upside surprise to rattle an already nervous market.
The headline CPI figure topped the anticipated 3.7%, marking the highest annual reading since May 2023. Core CPI, which strips out food and energy, climbed to 2.8% year-over-year, beating the 2.7% forecast and hitting its highest level since September 2025.
The damage across global markets
The selloff wasn’t limited to the NASDAQ 100. S&P 500 futures slid around 0.4%, while Dow futures dipped a more modest 0.1%. The tech-heavy NASDAQ bore the brunt because higher inflation expectations directly threaten the growth stock playbook, where valuations depend heavily on future earnings discounted at lower rates.
European markets caught the same cold. Germany’s DAX fell 1.22%, the Euro Stoxx 50 dropped 1.08%, France’s CAC declined 0.72%, and the UK’s FTSE 100 lost 0.41%.
What’s driving the inflation surprise
The 3.8% headline number represents a meaningful acceleration from recent trends. Underlying energy price pressures, potentially linked to geopolitical tensions including disruptions near the Strait of Hormuz, appear to be filtering through to broader consumer prices.
Core CPI hitting 2.8% is arguably the more concerning data point. The Fed watches core inflation closely because it strips away volatile food and energy components to reveal underlying price trends. At 2.8%, core inflation is moving in the wrong direction, and it’s now at its highest since September 2025.
Tech valuations under the microscope
The timing of this inflation print is particularly uncomfortable for technology investors. Major indices had been riding a wave of optimism to record highs in recent months, driven by AI enthusiasm and strong corporate earnings from mega-cap names.
Investor Michael Burry, who became famous for betting against the housing market before the 2008 financial crisis, has been warning about the potential for significant declines in the NASDAQ 100 due to what he sees as overvalued tech stocks. Inflation data that keeps the Fed on hold, or worse, pushes rate cut expectations further into the future, is exactly the kind of catalyst that could validate those concerns.