By Sarah Chen | May 19, 2026
Stocks slid for a second day Tuesday as fresh inflation concerns pushed Treasury yields higher and fueled a rotation from growth into defensive sectors. The S&P 500 fell 0.4%. The Dow lost 95 points. The Nasdaq declined 0.6%.
The catalyst was an unexpected uptick in the Producer Price Index for April, which rose 0.3% month-over-month against expectations of 0.1%. Core PPI, excluding food and energy, came in at 0.3% as well. The data raised concerns that disinflation had stalled, reinforcing the Fed’s higher-for-longer narrative.
The 10-year Treasury yield rose 6 basis points to 4.41%. The 2-year yield, more sensitive to Fed policy expectations, climbed 8 basis points to 4.68%.
Defensive sectors outperformed. Utilities added 0.7%. Consumer staples rose 0.4%. Healthcare was flat. On the losing side, technology fell 0.8%, consumer discretionary dropped 1.1%, and real estate declined 0.9%.
Morningstar published a note recommending investors reallocate from growth to value, citing the rate environment. The Russell 1000 Value Index outperformed its growth counterpart by 0.7 percentage points on the day.
