U.S. stock futures slipped in early trading Tuesday, led by a decline in Nasdaq 100 contracts, as investors weighed the dual pressures of rising crude oil prices and the upcoming release of April inflation data. The pullback comes on the heels of a strong session that saw both the S&P 500 and Nasdaq Composite close at record levels, fueled by momentum in semiconductor and artificial intelligence stocks.
By 5:49 a.m. ET, Dow Jones Industrial Average futures had fallen 56 points, or 0.11%, while S&P 500 futures lost 24.50 points, or 0.33%. The Nasdaq 100 futures posted a steeper decline, dropping 200.50 points, or 0.68%, reflecting heightened sensitivity among technology and growth names to interest rate expectations.
Oil prices continued their upward trajectory, with West Texas Intermediate crude advancing 3.12% and Brent crude rising 2.46%. Brent hovered near $106 a barrel, while U.S. crude pushed past $100, as supply concerns persisted. The market's focus remains on the Strait of Hormuz, a critical chokepoint for about 20% of global oil and liquefied natural gas flows. Analysts warned that if a peace deal in the region is not reached by the end of May, oil prices could see further upside, adding to inflationary pressures.
The inflation picture will come into sharper focus with the release of the Consumer Price Index at 8:30 a.m. ET. Economists surveyed by Reuters expect headline CPI to rise 0.6% in April, pushing the annual rate to 3.7%. Core CPI, which excludes volatile food and energy components, is forecast to increase 0.3% month over month, bringing the yearly figure to 2.7%. Lou Crandall, chief economist at Wrightson ICAP, noted that a lag in rent data could add roughly a tenth of a percentage point to core inflation this month.
The energy shock has already reshaped expectations for Federal Reserve policy. Goldman Sachs delayed its forecast for the first rate cut to December, while BofA Global Research expects the central bank to hold rates steady through the end of 2026. Traders are now pricing in rates remaining in the 3.50%-3.75% range for the remainder of the year, according to Reuters data.
Premarket trading showed a mixed picture among individual stocks. The Invesco QQQ Trust, which tracks the Nasdaq 100, slipped 0.67%, while the SPDR S&P 500 ETF Trust fell 0.32% and the SPDR Dow Jones Industrial Average ETF eased 0.13%. Chip stocks were under particular pressure, with Intel down 2.90%, Micron Technology losing 2.29%, and Qualcomm dropping 2.21%, erasing Monday's gains in the sector.
Elsewhere, Hims & Hers Health slid in premarket trade after reporting a first-quarter loss, and ZoomInfo retreated following disappointing revenue guidance. GitLab declined after announcing restructuring plans, while AST SpaceMobile tumbled on a wider-than-expected quarterly loss.
Global sentiment was also subdued, with European stocks edging lower as chip names took a breather. Comments from U.S. President Donald Trump that the Iran cease-fire is on "life support" added to geopolitical uncertainty. Daniel Casali, chief investment strategist at Evelyn Partners, noted that Trump's upcoming China trip is unlikely to yield major agreements, though "stability at the margin matters."
Despite the early weakness, some analysts see potential for a rebound if core CPI comes in softer than expected, which could ease bond yields and lift growth stocks. Conversely, a stronger-than-anticipated inflation reading or another surge in oil prices would likely weigh on the Nasdaq and push expectations for Fed rate cuts further into the future. As ING strategists Francesco Pesole, Frantisek Taborsky, and Chris Turner noted, the Fed's focus is squarely on the core number, but even a hot headline could stoke a more hawkish tilt in rate policy.
