S&P 500, Dow And Nasdaq Drop As Inflation Angst Spurs Rate Hike Fears — TSLA, SBUX, POET, MSFT, NVDA In Focus

• The S&P 500 and the Dow Jones eased 1.3% and 1% respectively, while the Nasdaq 100 fell 1.5%.
• The Nasdaq reported its first weekly drop in over six weeks for the week ending May 15.   
• U.S. 10-Year Treasury Yields top 4.5% on May 15th, the highest since a year.

U.S. stock indices dropped on Friday as surging bond yields and higher-for-longer inflation metrics renewed rate hike fears amid persistently elevated oil prices.

The S&P 500  fell 1.2%, the Nasdaq lost 1.5%, and the Dow Jones declined 1.1%. The Russell 2000, which tracks stocks with small market capitalizations, fell 2.4%, the index's worst day in 2026. 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 1.4%, and Invesco QQQ Trust (QQQ) ended Friday around 2% lower, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) eased 1.2%. While SPY ended the week marginally higher, up 0.2%, QQQ and DIA ended the week down between 0.2% and 0.3%. 

The VanEck Semiconductor ETF (SMH) dropped 4%. 

Meanwhile, retail sentiment on Stocktwits for SPY, QQQ, and DIA was all in the ‘bullish’ territory.

According to the Survey of Professional Forecasters, a group that is polled each quarter by the Federal Reserve Bank of Philadelphia, projected the U.S. CPI to hit 6% for the first quarter.

In the most recent forecast three months ago, the panel projected a consumer price index gain of just 2.7%. However, that was just before the U.S. and Israel launched attacks against Iran.  

For the full year, the group forecast the CPI rate at 3.5% for the all-items and 2.9% for core, which excludes volatile food and energy prices. That’s up from estimates of 2.6% for both in the prior survey done three months ago. 

Two inflation reports earlier this week also showed rising price pressures in the retail and wholesale markets, adding to bets that the U.S. Federal Reserve’s regime-change efforts might not be all that easy. 

US 10-year yields topped 4.5%, and with the Iran conflict showing no signs of ending, investors are beginning to get jittery that the closure of the Strait of Hormuz will further deepen the energy disruptions.  

Generally, when bond yields spike, investors tend to move away from equities, especially technology shares. A rise in yields raises the cost of borrowing for corporates, diminishing the current value of future earnings in analyst models. 

“Risk sentiment is being dented by a global rise in bond yields, driven by a combination of inflation concerns, expectations for central-bank hikes, and worries around government debt as countries look to cushion the impact of higher energy prices,” said Angelo Kourkafas, Senior Global Strategist at Edward Jones, in an interview to Bloomberg. 

Trending Stocks To Watch 

Tesla (TSLA): Shares of Tesla slipped 4% on Friday amid a broad selloff in tech stocks, while concerns for the EV giant’s business in China weighed further on the stock. 

Starbucks (SBUX): Starbucks Corp on Friday announced its third round of job cuts, affecting 300 employees in the U.S., as the company continues its strategic turnaround efforts. 

Poet Technologies (POET): POET Technologies shares declined after the company disclosed plans to raise capital through a securities offering and announced long-time finance chief Thomas Mika’s decision to leave the company later this year.  

Microsoft (MSFT): Billionaire hedge fund manager Bill Ackman on Friday revealed that Pershing Square has acquired a new stake in Microsoft, adding that the firm will disclose the position in a 13F filing.

Nvidia (NVDA): U.S. President Donald Trump on Friday said that China has not yet approved purchases of Nvidia’s H200 AI chips. 

Broader Market Trends 

Crude oil prices jumped on Friday, rising past $105 per barrel after Trump told Fox News that he is losing patience with Iran. Brent crude futures for July gained more than 3% to close at $109.26 a barrel. U.S. West Texas Intermediate futures for June advanced more than 4% to settle at $105.42 per barrel, CNBC reported. 

Read More: This Consumer ETF Dropped 13% From Its January Highs -- A Look At How Industry Dynamics Changed Since The Iran War

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