Stock market today: Dow, S&P 500, Nasdaq futures pare losses as CPI report lands, US-Iran truce teeters

US stocks dipped into the red on Wednesday after the latest consumer inflation report reported price increases in line with expectations, while renewed US-Iran military clashes cast doubt on the odds for peace negotiations.

The Nasdaq Composite ( ^IXIC ) led the pullback, down 0.7% as Tuesday's sell-off in tech stocks deepened, while S&P 500 ( ^GSPC ) and Dow Jones Industrial Average ( ^DJI ) both fell around 0.5%.

The focus was on May's CPI report , which showed consumer prices rose at the fastest rate since May 2023. The 4.2% annual rise in consumer prices was in line with economists' expectations; however, the hot reading may boost bets that the Federal Reserve will hike interest rates this year.

Energy prices remained the biggest driver of inflation amid the protracted war with Iran, 7.

Techs look set for another bruising as the rotation out of the AI trade continues, as concerns around OpenAI ( OPAI.PVT ) and Anthropic's ( ANTH.PVT ) mega-IPOs build .

Tensions between the US and Iran ramped back up, with the two sides trading strikes overnight after a US Apache helicopter was downed on Monday near the Strait of Hormuz. President Trump early Wednesday posted on social media that Iran has "taken too long" to negotiate and would have to "pay the price." Oil prices gained after Trump's post.

On Wednesday after the bell, Oracle ( ORCL ) is set to report its earnings results. Investors will pay attention to the details of the company's cloud business, which counts OpenAI as a customer, amid fluctuations in the AI trade.

The main event of the week lands on Friday, with the expected IPO of Elon Musk's SpaceX ( SPCX ). The company's debut is expected to mark the largest public offering in history.