U.S. stocks tumbled as inflation surged to 4.2%, the highest in three years, driven by Middle East tensions boosting energy prices. Markets reacted sharply to geopolitical risks, with the Dow Jones falling 1.9% (losing 953 points), the S&P 500 dropping 1.6%, and the tech-heavy Nasdaq plunging nearly 2% amid AI trade concerns.

Super Micro Computer shares cratered 28% after announcing a $7 billion equity offering to fund AI chip purchases, signaling investor skepticism. The company’s struggles echo its March slump following a board member’s smuggling charges. Meanwhile, NextEra Energy’s $18 billion takeover of Dominion Energy faces regulatory hurdles, yet its stock is deemed undervalued, with a $4.83 billion breakup fee suggesting potential upside if the deal falters.

Market volatility reflects dual pressures: sticky inflation delaying Fed rate cuts and escalating U.S.-Iran tensions after the Pentagon retaliated for a downed helicopter. Crude prices rose 1.8%, amplifying economic uncertainty. Investors remain wary of both macroeconomic and corporate-specific risks, underscoring a fragile rebound from recent market highs.