US Stocks Slip After March CPI Rises; Nasdaq Lifted by AI Chips

U.S. stocks slipped after the Bureau of Labor Statistics reported March consumer prices rose 0.9% month over month and 3.3% year over year, the largest annual increase since May 2024. Gasoline rose 21.2% in March and fuel oil climbed about 30.7% for the month. Core CPI, which excludes food and energy, rose 0.2% month over month and 2.6% year over year.

The Nasdaq Composite rose 0.38% to 22,908.10, driven by semiconductor and AI-related names. The S&P 500 slipped 0.03% to 6,822.88 and the Dow Jones Industrial Average fell 0.48% to 47,956.30. The Russell 2000 declined about 0.37%. Market breadth was narrow, with roughly 42% of listed stocks advancing.

Taiwan Semiconductor Manufacturing Co. reported record first-quarter revenue of NT$1.13 trillion ($35.6 billion), a 35% increase year over year, and said March sales surged as AI chip orders remained strong. Broadcom rose 4.54%, Nvidia added 2.29% and AMD gained 3.43%. Smaller cloud GPU provider CoreWeave jumped after announcing an upsized $3.5 billion convertible note sale and expanded multi-year deals, including a $21 billion arrangement with Meta and a contract to power Anthropic’s Claude models. Palantir fell 1.89% after investor Michael Burry questioned the company’s AI positioning.

Basic materials led sector gains, supported by stronger precious metals, and utilities also rose. Healthcare, consumer defensive and financials posted the largest declines. Drugmakers and large retailers fell as higher energy and input costs could pressure margins, and banks pared gains amid reduced odds of near-term rate cuts.

Technical indicators showed the S&P 500 trading above its 20-, 50-, 100- and 200-day exponential moving averages for the first time since February. The index has recovered from a low near 6,318 on March 30 and traders noted the 0.618 Fibonacci retracement level at about 6,806 as a near-term reference point.

Investors are watching talks scheduled between U.S. and Iranian officials this weekend about shipping through the Strait of Hormuz, which could affect oil supply and prices. The Federal Open Market Committee meets on April 29; policymakers will assess whether the March price spike reflects a temporary energy shock or broader price pressure when setting the near-term path for interest rates.

One economist wrote that the Federal Reserve may struggle to return inflation to target if energy costs remain volatile.