Investing.com — U.S. stocks gave up gains on Tuesday, after Treasury yields rose as data pointing to signs of steady inflation dampened interest rate cut hopes, offsetting Nvidia-led charges in technology stocks.
At 14:28 ET (18:28 GMT), it was down 589 points, or 1.5%, while down 0.8%, and the heavy technology stock was down 0.4%.
New signs of rising inflation cool bets on an interest rate cut
The S&P Global Flash US Composite PMI rose sharply from 51.3 in April to 54.4 in May, with the report also highlighting that “the inflation rate is accelerating to record the second-largest monthly increase in the past eight months.”
New fears that fundamental strength in the economy could lead to a rebound in inflation have cooled investors' expectations for a rate cut just a day after minutes from the Federal Reserve's May meeting showed members were concerned about stalling inflation.
Treasury yields jumped, with the yield on the interest rate-sensitive two-year Treasury note rising 4.9 basis points to 4.93%, forcing traders to rein in their bullish bets on stocks.
About 48% of traders expect a rate cut in September, down from 51% the day before.
Nvidia's (NASDAQ:) positive first quarter rally is boosting the technology sector
Technology shrugged off the broader market crisis as Nvidia stock jumped 10% to a record high after the chipmaker's first-quarter earnings beat previous estimates. The company also provided a stronger-than-expected revenue outlook for the current quarter, and announced a 10-for-1 forward stock split.
Some on Wall Street were keen to point out that Nvidia's customer base is expanding beyond cloud providers, potentially easing “reliance on large US telecom providers,” UBS said.
Live Nation sinks after Justice Department lawsuit report
There was more corporate news to digest, outside of Nvidia's earnings, with Live Nation Entertainment (NYSE:) stock falling 8% on a report that the Department of Justice was planning to file a lawsuit against the company over alleged monopolistic practices by its Ticketmaster unit. , and that lawmakers were also seeking to separate Ticketmaster from the company.
News Corp (NASDAQ:) stock fell 0.3% after the news giant signed a content sharing agreement with OpenAI, giving the latter access to content from many of its largest publications.
Boeing in China is experiencing problems and warns of cash flow. ELF Beauty shines on the earnings scene
Boeing Company (NYSE:) fell more than 7% after the plane maker warned investors that its cash flow could take a bigger hit than the $3.9 billion seen in the first quarter, making it unlikely it will be able to turn in positive cash flow for the year.
In the first quarter, the company said it expected to end the year with positive cash flow, but a series of production issues and the departure of its CEO impacted performance.
The company also said China has halted deliveries as the country's aviation regulator seeks additional certification documents.
ELF Beauty Company Meanwhile, (NYSE:) stock rose 18% after the cosmetics company reported fourth-quarter financial results that beat Wall Street estimates.
(Peter Nourse and Ambar Warrick contributed to this article.)