SG Morning Brief | Hot CPI Triggers Chip Selloff, Warsh Confirmed to Fed Board

US Overnight

The S&P 500 slipped 0.16% to 7,400.96, the Nasdaq Composite fell 0.71% to 26,088.20, and the Dow edged up 56.09 points (+0.11%) to 49,760.56. April CPI came in hotter than expected: headline inflation rose 0.6% MoM and 3.8% YoY (above the 3.7% consensus), the highest annual reading since May 2023. Core CPI was +0.4% MoM and +2.8% YoY, also above estimates. WTI crude surged 4.19% to settle at $102.18 as CNN reported Trump is considering restarting combat operations in Iran. The Senate confirmed Kevin Warsh to the Fed Board of Governors in a 51-45 vote; his chair confirmation vote is expected today. CME FedWatch now prices a 98% chance the Fed holds in June, with a 30% probability of a rate hike by December.

Key Movers

Qualcomm (QCOM) -11% — Qualcomm fell 11.46% to $210.31 in its worst single-day decline since 2020, giving back most of Monday's 8.4% record-high surge. The selloff was driven by hot CPI data, profit-taking after a 60% run-up in weeks, and analyst criticism that Qualcomm's core mobile business faces structural headwinds from Apple insourcing and Nvidia entering Windows processors. KeyBanc reported a 27% MoM decline in April laptop shipments.

Intel (INTC) -7% — Intel fell 6.82% to $120.61, reversing from its all-time high of $124.92 amid the broader semiconductor profit-taking wave. Despite the decline, the stock remains up over 430% year-over-year and the Apple foundry deal narrative is intact. On Semiconductor and Skyworks Solutions both fell more than 6%.

Micron (MU) -4% — Micron fell 3.6%, snapping a seven-session winning streak that had added 37% in a single week. The iShares Semiconductor ETF (SOXX) sank 5% on the day, though the index has still surged 65% year-to-date. A South Korean proposal to tax AI-related profits added a new risk factor for memory names.

SGX Preview

The STI's last confirmed close was 4,921.90 on May 8; more recent closes were not available at time of writing. DBS is trading near S$59.10 based on the latest data. The hot CPI is a headwind for rate-sensitive Singapore equities, but the banking trio (DBS, OCBC, UOB) benefits from higher-for-longer rates through sustained net interest margins. The chip selloff may weigh on Venture Corp and local tech-adjacent names.

Asia Pre-Market

S&P 500 futures are down 0.14%, Nasdaq futures down 0.34%, and Dow futures roughly flat — cautious ahead of today's PPI. Gold is at $4,733 (+0.08%) and Bitcoin at $81,165 (+0.45%). Oil remains elevated near $99-102, keeping inflation fears front and center.

Today's US Earnings and Economic Calendar

Warsh chair confirmation vote expected today. Powell's term as Fed Chair ends Friday May 15.

Data Spotlight: April PPI — After yesterday's hot CPI, today's Producer Price Index takes on added significance. March PPI was +0.5% MoM and +4.0% YoY. A strong April reading would confirm the inflationary impulse and further dim rate cut hopes. If PPI comes in soft, it could partially offset the CPI alarm. The Warsh chair vote today adds another layer: if confirmed, Warsh takes over a Fed that now has a 30% market-implied probability of hiking rates by year-end.

One More Thing

The chip selloff was overdue. The PHLX Semiconductor Index had surged 65% year-to-date, and Seeking Alpha noted it was trading 50% above its 200-day moving average — a level last seen in 2000. The CPI miss provided the excuse, but gravity was always going to reassert itself. Yet the S&P 500 barely moved — meaning the rest of the market absorbed the chip selling without breaking. David Einhorn, speaking at the Sohn Conference, said stocks remain "very, very pricey" and he missed the six-week V-shaped recovery. The market is now in a holding pattern between two forces: an earnings season where 82% of S&P 500 companies beat estimates with 25% EPS growth, and an inflation picture that has all but killed rate cut hopes. Nvidia earnings next Wednesday (May 20) will determine whether the semiconductor correction deepens or reverses.

This briefing is for informational purposes only and does not constitute investment advice.