US stock futures fell on Tuesday as investors waited for the latest consumer inflation reading, and the reaction turned more cautious once the data hit. Nasdaq 100 futures fell 0.7%, S&P 500 futures slipped roughly 0.4% and Dow Jones Industrial Average futures were broadly flat ahead of the April consumer price report.
The Bureau of Labor Statistics said consumer prices rose 0.6% in April from the previous month and 3.8% from a year earlier, the biggest annual increase since May 2023. Core CPI, which strips out food and energy, rose 0.4% on the month and 2.8% over the year, while energy prices climbed 3.8% in April and were up 17.9% from a year earlier.
That came through in the parts of the report households notice most. Energy commodities rose 5.6% in April, energy services increased 1.6%, gasoline prices were 28.4% higher than a year ago and fuel oil prices jumped 54.3%. Food prices rose 0.5% in the month and 3.2% over the year, while airline fares surged 6.3% from March and 20.7% over the previous 12 months.
The numbers landed after Friday’s jobs report came in stronger than expected, leaving investors with less room to hope that inflation would keep easing quickly. With West Texas Intermediate crude rising 3.7% to over $101 a barrel and Brent crude futures up 3.4% to nearly $108 a barrel on Tuesday, the market was looking for signs that higher energy costs tied to the Strait of Hormuz blockade were beginning to move into consumer prices.
That is the strain behind the cpi report today: inflation is broad enough to keep policy makers on edge, but much of the pressure is being driven by energy and other volatile costs tied to geopolitics. President Trump said the US-Iran ceasefire agreement was on “massive life support” and rejected Iran’s response to US proposals, underscoring how quickly the oil backdrop can change.
The report arrived as Trump was also set to begin a trip to China and meet President Xi Jinping, with trade and artificial intelligence expected on the agenda. For investors, the next move will depend on whether rising energy costs keep feeding through to the broader economy or whether this month’s inflation spike proves to be a temporary shock.
