Tech Sector Hit Hard as Traders Prepare for May CPI Report

The selloff in the US equity market is intensifying as traders prepare for the release of the May Consumer Price Index report. The report, scheduled to be released on June 10 at 8:30 a.m. ET, is expected to show a 4.2% year-over-year increase in CPI, which would be the highest reading since mid-2023.

The tech sector is bearing the brunt of this anxiety as AI-fueled valuations are being stress-tested against the reality that borrowing costs may not come down anytime soon. This has led to a decline in technology shares and a subsequent impact on cryptocurrency prices, with Bitcoin dropping by 14% over the past week and Ethereum falling by 15.8%.

The expected increase in CPI is largely attributed to soaring energy prices tied to escalating geopolitical tensions in the Middle East. A hotter-than-expected CPI report would eliminate remaining expectations for Federal Reserve interest rate cuts in 2026, strengthening the US dollar and putting downward pressure on both crypto and equities.