Technology shares are leading US equities lower for a second consecutive session, and the timing is not a coincidence. Traders are dumping risk assets ahead of the May Consumer Price Index report, scheduled for release on June 10 at 8:30 a.m. ET, where economists are forecasting a 4.2% year-over-year increase. That would be the highest CPI reading since mid-2023.
The selloff is not contained to Wall Street. Asia-Pacific markets got hit hard too, with Korea’s Kospi tumbling as much as 4.4% on weakness in chipmaker stocks. And in crypto, the damage has been even more severe: Bitcoin dropped approximately 14% during the week ending June 9, while Ethereum fell about 15.8% over the same stretch.
What’s driving the panic
April’s CPI already came in uncomfortably warm, rising 0.6% month-over-month and 3.8% year-over-year. Now, forecasters expect May’s number to accelerate further to 4.2%, a jump largely attributed to soaring energy prices tied to escalating geopolitical tensions in the Middle East.
The tech sector is now bearing the brunt of that anxiety. AI-fueled valuations are suddenly getting stress-tested against the reality that borrowing costs might not come down anytime soon.
