S&P 500 -1.24%, Nasdaq -1.54%, 10-yr yield spikes to 4.54% as import-price shock and Hormuz fears trigger global bond-equity selloff

Three-pronged shock: import prices, oil, and bonds

The S&P 500 closed at 7,408.50 on May 15, down 1.24% from the prior session, while the Nasdaq slid 1.54%. The broad selloff reflected three overlapping catalysts that re-ignited inflation fears.

The primary data shock came from the Bureau of Labor Statistics (BLS): April import prices rose 1.9% month-over-month, nearly double the +1.0% consensus estimate. On the same day, Japanese wholesale prices logged their largest monthly increase in 12 years, signaling supply-side price pressures spreading beyond the United States.

Geopolitical fuel was added when President Donald Trump's visit to Beijing concluded without any agreement to reopen the Strait of Hormuz. With Iranian energy exports still effectively blocked, oil prices surged more than 3% intraday, further stoking inflation expectations.

The combination drove a sharp bond-market selloff. The 10-year US Treasury yield jumped 116 basis points to 4.54%, its highest level in nearly a year. The 30-year yield broke above 5.1%. CME FedWatch data showed the probability of at least one 25-basis-point Fed rate hike before year-end rising to approximately 50%, with a move fully priced in by March 2027. ECB rate-hike expectations also intensified, with money markets pricing multiple increases beginning in June.

Semiconductors hit by failed Trump-Xi chip talks

Reports that US-China negotiations at the summit produced no breakthrough on semiconductor export restrictions added a second blow to equity markets. Marvell Technology ($MRVL) and Intel ($INTC) each fell more than 5% in pre-market trading. Energy stocks outperformed as oil prices climbed.

What to watch next

The next key data points are the FOMC minutes (expected May 21) and the PCE price index (May 28). If the PCE reading aligns with today's import-price surprise, bond market volatility could escalate further. Developments in Iran nuclear negotiations and any White House action on additional chip-export restrictions toward China will also remain top-of-mind for investors.