Closing Bell: Markets Pull Back on Hotter-Than-Expected Inflation Data

Key Points

•            Equities finish mostly lower with small caps lagging and defensive sectors outperforming. Tech and Consumer Discretionary underperform.

•            Hims & Hers slides on Q1 miss, as a GLP-1 strategy shift weighs on margins.

•            Inflation accelerates to 3.8% YoY, with energy driving over 40% of April’s CPI gain.

U.S. equities recovered from earlier session lows but still finished mostly lower, with the Dow Jones Industrial Average the lone exception.

The S&P 500 fell 0.16%, the Nasdaq 100 declined 0.87%, and the Russell 2000 dropped 0.97%. Health Care, Consumer Staples, and Financials led on the day, while Consumer Discretionary and Technology lagged.

Hims & Hers Slides After Q1 Miss as GLP-1 Pivot Weighs on Margins

Shares of Hims & Hers (HIMS), the health and wellness platform, fell sharply after the company posted Q1 on revenue and earnings that were below expectations. The shortfall was largely driven by its strategic pivot away from compounded GLP-1 offerings toward branded treatments like Novo Nordisk’s Wegovy, which pressured margins and shifted revenue timing. Results were further impacted by roughly $33 million in restructuring charges tied to GLP-1 supply chain write-downs, along with additional one-time legal and M&A costs. 

Inflation Accelerates to 3.8% on Energy, Shelter Gains

Consumer prices rose in April, with the CPI increasing 0.6% month over month following a stronger 0.9% gain in March, while the annual inflation rate accelerated to 3.8%.

The monthly move was driven largely by energy, which climbed 3.8% and accounted for more than 40% of the increase, alongside a 0.6% rise in shelter and a 0.5% gain in food prices. Core CPI (excluding food and energy) rose 0.4% on the month and 2.8% year over year, with gains in categories such as airline fares, apparel, and household furnishings, partially offset by declines in new vehicles, communication, and medical care. On a yearly basis, energy prices surged 17.9%, while food rose 3.2%, and shelter remained a key contributor at 3.3%. Overall, the data reflects persistent inflation pressures, led by energy costs and firm services inflation, despite some softening in select goods categories.

Economic Events for Tomorrow (ET)

•            8:30am: PPI

•            10:30am: Crude Oil Inventories

•            11:30am: FOMC Member Collins Speaks

•            Tentative: Fed Chair Nomination Vote

•            1:01pm: 30-year Bond Auction

•            1:15pm: FOMC Member Kashkari Speaks

Earnings Calendar

Before Market Open: BABA, NBIS, TSEM, BIRK

After Market Close: CSCO

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