Tech Stocks Tumble as Markets Grapple with Inflation Concerns

Wednesday’s trading painted a picture of growing uncertainty. After opening near flat, major indices gradually shifted into the red as the session progressed. By midday, selling pressure intensified across the board.

The day’s scorecard told a story of broad-based weakness: the Dow fell 228 points (-0.47%), while the S&P 500 and Nasdaq experienced steeper declines of -1.16% and -1.81% respectively. The Russell 2000 small-cap index dropped -1.14%. This marks the fourth consecutive down day for both the Dow and S&P 500, signaling that the market’s upward momentum from earlier in the year has clearly faded.

Where the Pain Hit Hardest

Technology and growth-oriented sectors bore the brunt of the selling. NVIDIA, Broadcom, and Oracle—three pillars of the AI rally that carried markets through much of 2025—all took significant hits, declining -3.8%, -4.5%, and -5.4% respectively. The pain wasn’t confined to semiconductors: Tesla slumped -4.6% despite hitting an all-time closing high just a day prior, as investors booked profits amid ongoing regulatory scrutiny from the California DMV regarding self-driving capability claims.

Industrial and housing-related stocks also struggled. Caterpillar lost -4.7%, while Lennar Home fell -4.4%. The Nasdaq has now dipped into red territory over the past month and sits -6.5% below its late-October peak.

One Bright Spot: Micron’s Stellar Q1

After hours, memory-chip manufacturer Micron delivered a breath of fresh air. The company smashed expectations with earnings of $4.78 per share—crushing the consensus estimate of $3.91—and revenues reached $13.64 billion versus the anticipated $12.74 billion. Forward guidance also surpassed expectations.

Operating cash flow nearly doubled year-over-year to $8.41 billion, while cloud memory revenue doubled to $5.28 billion with improved 66% gross margins. The stock surged +5% in late trading and has now appreciated +168% year-to-date.

Tomorrow’s Big Test: The CPI Print

All eyes turn to Thursday morning when the November Consumer Price Index lands. The delayed inflation report—pushed back due to government shutdown procedures—will provide critical insight into whether price pressures are moderating or accelerating.

Current consensus expects a +3.1% year-over-year headline inflation rate, which would represent the highest reading since May 2024. Core CPI is anticipated at +3.0%. This matters significantly: inflation has ticked up or remained flat in each month since April’s +2.3% low. Combined with yesterday’s softer employment data, a hotter-than-expected CPI could deepen concerns about economic momentum heading into 2026.

The question facing investors: Is the recent selloff simply profit-taking after a stellar 2025, or are markets pricing in legitimate economic headwinds? The inflation data may provide answers.