Abigail Somerville
NEW YORK (Reuters) – The Nasdaq Composite Index topped 17,000 points for the first time on Tuesday, buoyed by a rise in Nvidia shares, while the S&P 500 closed modestly higher and the Dow Jones Industrial Average closed lower on rising Treasury yields.
Nvidia rose 7% and other semiconductor stocks also rose as traders returned from a long holiday weekend. The Semiconductor Index rose 1.9%.
S&P 500 technology stocks led the sector gains, while health care stocks were the biggest losers along with industrials.
Stocks fell in afternoon trading as Treasury yields rose to their highest in several weeks following a weak U.S. bond auction.
“The two results were disappointing, which caused yields to rise and the (stock) market to react negatively,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
“The market does not want yields to rise to a level that threatens the economy and consumers and disrupts the (Fed’s) schedule of monetary easing.”
Investors were awaiting U.S. inflation data this week that could influence expectations of a Fed rate cut.
The U.S. Core Personal Consumption Expenditures Price Index report for April is due to be released later this week, and the Fed’s preferred inflation measure is expected to stabilize month-on-month.
The Dow Jones Industrial Average fell 216.73 points, or 0.55%, to 38,852.86, the S&P 500 rose 1.32 points, or 0.02%, to 5,306.04 and the Nasdaq Composite added 99.09 points, or 0.59%, to 17,019.88.
Wall Street has been hitting record highs in recent days as investors bet the U.S. central bank may cut interest rates later this year.
The data still shows inflation is high, keeping policymakers on their toes and sending expectations about the timing of rate cuts up and down.
The only two months this year where the probability of a cut of at least 25 basis points is above 50%, according to the CME FedWatch tool, are November and December. The probability of a September cut has fallen to about 46%, down from above 50% a week ago.
Retail will also be in the spotlight this week, with several retailers including Dollar General, Advance Auto Parts and Best Buy scheduled to report earnings.
U.S. trading will move to shorter settlements starting Tuesday in a move that regulators hope will reduce risks and improve efficiency but will mean a temporary increase in trade failures for investors.
Apple shares rose after iPhone sales in China rose 52% in April from a year earlier, according to Reuters calculations based on industry data, but shares pared gains in late trading to close slightly higher at $189.99.
GameStop shares rose about 25.2% to close at $23.78 after the video game retailer said late Friday it had sold 45 million shares as part of an “at-the-market” offering to raise $933 million.
Hess shareholders approved a $53 billion merger with Chevron. Hess shares closed up 0.4%, Chevron shares up 0.8% and Exxon Mobil shares up 1.3%.
Declining stocks outnumbered advancing stocks by a 1.34-to-1 ratio on the Nasdaq, while declining stocks outnumbered advancing stocks by a 1.75-to-1 ratio on the NYSE.
The S&P 500 recorded 24 52-week highs and 11 lows, while the Nasdaq Composite recorded 93 highs and 107 lows.
Volume on U.S. exchanges was 11.91 billion shares, below the 12.32 billion average for the full trading period over the past 20 trading days.
(Reporting by Abigail Somerville in New York; Additional reporting by Caroline Valetkevich in New York, Johan M. Cherian, Lisa Pauline Matakkal and Shubham Batra in Bengaluru; Editing by Pooja Desai and David Gregorio)
