On Tuesday, the Nasdaq hit 17,000 for the first time on strong gains in Nvidia shares, while the S&P 500 ended slightly higher and the Dow Jones Industrial Average fell as Treasury yields rose.
Shares of Nvidia (NVDA.O) rose 7%, also lifting shares of other chip makers as traders returned to the market after a long weekend. The semiconductor index (.SOX) recorded an increase of 1.9%.
The S&P 500's technology (.SPLRCT) sector posted the best gains, while healthcare (.SPXHC) and industrials (.SPLRCI) posted the biggest declines.
The current situation in the stock market was exacerbated by rising US Treasury yields, which reached a multi-week high after the results of auctions for the sale of government debt were unsatisfactory.
"We experienced two unsuccessful auctions, which led to higher bond yields and a negative reaction in the stock market," said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
He also added: "The market is discouraged from rising bond yields to levels that could threaten economic stability and consumer demand, and disrupt the Federal Reserve's policy easing plans."
This week, investors are eagerly awaiting new data on inflation in the United States, which could significantly affect the forecasts for changes in the Federal Reserve's key rate.
The main report on the core US personal consumption price index for April is due out this week. This key inflation indicator, which the Federal Reserve uses to make decisions, is expected to show stability on a monthly basis.
The Dow Jones Industrial Average (.DJI) suffered losses, falling 216.73 points, or 0.55%, to 38,852.86. Meanwhile, the S&P 500 (.SPX) rose slightly 1.32 points, or 0.02%, to 5,306.04, and the Nasdaq Composite (.IXIC) rose 99.09 points, or 0.59 %, closing at 17,019.88.
Wall Street continues to set records as investors look to the Federal Reserve to cut interest rates later this year.
Fluctuations remain in expectations about the timing of rate cuts, with policymakers remaining cautious as economic data continues to show significant inflation.
According to the CME FedWatch tool, the likelihood of an interest rate cut of at least 25 basis points is greater than 50% only in November and December of this year. In September, the figure dropped to about 46% from more than 50% the week before.
Market attention is also focused on retail, especially with upcoming reports from major retailers including Dollar General (DG.N), Advance Auto Parts (AAP.N) and Best Buy (BBY.N).
On Tuesday, US stock markets will begin the transition to a shorter settlement cycle. Regulators expect this to reduce risks and improve operational efficiency, although it is expected that the transition may initially increase the number of failed deals among investors.
Apple's (AAPL.O) share price rose after iPhone sales in China rose 52% in April from a year earlier, according to Reuters calculations based on industry data. However, by the close of trading, the stock's gains had slowed and it ended only slightly higher than its previous level, at $189.99.
GameStop (GME.N) shares jumped 25.2% to finish the day at $23.78 after the company announced Friday evening that it had raised $933 million by selling 45 million shares in what it called a "market" offering.
Shareholders of Hess (HES.N) approved its merger with Chevron (CVX.N), valued at $53 billion. Hess shares ended up 0.4%, Chevron shares were up 0.8% and Exxon Mobil (XOM.N) shares were up 1.3%.
On the Nasdaq, decliners outnumbered advancers by a ratio of 1.34 to 1. On the NYSE, the ratio was 1.75 to 1.
The S&P 500 posted 24 new highs and 11 new lows for the year, while the Nasdaq Composite posted 93 new highs and 107 new lows.
Trading volume on US exchanges reached 11.91 billion shares, slightly below the average level of 12.32 billion recorded over the past 20 trading days.
US Treasury yields rose after a failed debt auction. It also rose earlier when data showed an unexpected improvement in US consumer confidence in May, boosted by optimism about the labor market, which had seen contraction for the previous three months.
Meanwhile, March saw a sharp slowdown in US home price growth, likely as rising mortgage rates put pressure on demand.
"The market is nervously awaiting confirmation of a slowdown in inflation towards the Fed target," an analyst from Goldman comments on the situation.
The MSCI Global Share Index .MIWD00000PUS lost 1.28 points, or 0.16%, to 792.07.
Europe's STOXX 600 index (.STOXX) ended the session down 0.6%. Treasury yields rose after two failed government debt auctions raised doubts about demand for U.S. government debt, while investors also weighed economic indicators that raised uncertainty about the Federal Reserve's future monetary policy.
"Given Tuesday's volume of supply, which included $297 billion in coupons and notes, some discomfort is to be expected," said Tom Simons, an economist at Jefferies in New York.
The yield on the 10-year US benchmark note rose 6.7 basis points to 4.54%, up from 4.473% reported late Friday. Also, the 30-year yield rose 7.9 basis points to 4.656%.
The 2-year yield, which traditionally responds to changes in interest rate expectations, rose 2.1 basis points to 4.9742%.
As for the foreign exchange market, the dollar index recovered its position after the rise in Treasury yields and showed a slight increase.
"The bond market took a sharp turn on Tuesday and the dollar followed suit," said Adam Button, chief currency analyst at ForexLive in Toronto, citing weak auction results and noting that an improvement in the consumer confidence report suggested stronger economic growth.
The index measuring the dollar against a basket of foreign currencies, including the yen and the euro, rose 0.04% to 104.60, while the euro remained unchanged at $1.0858.
Against the Japanese yen, the value of the dollar increased by 0.18%, reaching 157.14.
Oil prices rose more than a dollar a barrel in anticipation that OPEC+ will continue to curb crude supplies at its upcoming meeting on June 2. Additional growth in commodity prices was triggered by the start of the summer road travel season in the United States and the weakening of the dollar.
US crude futures rose 2.71% to $79.83 per barrel, while Brent crude rose 1.35% to settle at $84.22 per barrel.
There was also an increase in gold prices: the spot price of gold rose by 0.33%, reaching $2,358.58 per ounce. US gold futures rose 1.17% and now cost $2,359.70 an ounce.
