Stock Market News Today: Markets mixed, Nasdaq crosses 17K for first time ever (SP500)

U.S. stocks on Tuesday kicked off the holiday-shortened week on a mixed note, as some cautious commentary from a Federal Reserve speaker offset data that showed an uptick in consumer confidence this month.

Investors are returning from a three-day weekend because of the Memorial Day holiday. Wall Street is on a five-week win streak, but has recently stalled near record levels due to uncertainties over interest rate cuts.

Tuesday also marks the start of the “T+1” rule coming into effect – a new cycle under which market participants will be required to settle equities in one day rather than two. The shift is expected to have little impact on trading decisions.

The benchmark S&P 500 (SP500) had barely budged from the flat line, last up 0.05% to 5,307.39 points in afternoon trade. The blue-chip Dow (DJI) was lower by 0.63% to 38,824.54 points.

The tech-heavy Nasdaq Composite (COMP:IND) added 0.55% to 17,014.15 points, scaling the 17,000 mark for the first time ever. The index was buoyed by a third straight day of gains in Nvidia (NVDA), following yet another blowout quarterly report by the chip giant last week.

Of the 11 S&P sectors, seven were in the red.

Minneapolis Federal Reserve President Neel Kashkari – who is known as one of the more hawkish Fed policymakers – said that he wasn’t ruling out potential rate hikes in the future.

“I’ve been asked many times, would we take potential interest rate increases off the table? I don’t think anybody has formally taken them off the table, even me,” Kashkari said, speaking at a Barclays-CEPR event in London. “I say that we can sit here for as long as necessary until we get convinced that inflation is sustainably going back down to our 2% target. I’m not ruling out potential interest rate increases from here,” he added.

The comments countered data from the Conference Board that showed an uptick in its gauge of consumer confidence for May, reversing three straight months of declines. However, while the performance was better than anticipated, it still marked the second-lowest reading of the past year and a half. Moreover, breaking down the details of the report, average 12-month inflation expectations ticked up in May.

“It is an anomaly or perhaps even an advantage of human nature that we can hold seemingly conflicting views about something in our heads. It is rare that this capacity is on display in survey data. In today’s report, some specific survey questions revealed that consumers are simultaneously upbeat about the stock market even as a growing share see a recession as more likely,” Wells Fargo’s Tim Quinlan said.

The focus now shifts to Friday’s personal income and outlays data. That report will contain a reading on the Fed’s favored inflation gauge – the core personal consumption expenditures price index.

Tuesday’s economic calendar also had some housing market indicators on the docket. The S&P Corelogic Case-Shiller Index surged to a record high in March, with all major metro markets reporting M/M price increases. Meanwhile, FHFA data showed house prices rose 0.1% M/M in March.

Turning to the fixed-income markets, U.S. Treasury yields were higher as traders sold off bonds after a $69B 2-year and a $70B 5-year note auction both tailed. The longer-end 30-year (US30Y) and 10-year yields (US10Y) were both up 6 basis points each to 4.64% and 4.53%, respectively. The shorter-end more rate-sensitive 2-year yield (US2Y) gained 3 basis points to 4.97%.

See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.

Looking at active stocks, shares of US Cellular (USM) – one of the country’s last major regional wireless carriers – rose after it said it would sell substantially all of its wireless operations to T-Mobile US (TMUS) for about $4.4B.