(For a Reuters live blog on U.S., UK and European stock

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US moves towards faster stock settlement

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Nasdaq touches fresh record high

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Apple ( AAPL ) gains on strong iPhone sales in China

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UBS lifts S&P 500's year-end target to Street high of

5,600

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Indexes: Dow down 0.33%, S&P up 0.07%, Nasdaq up 0.52%

(Updated at 11:29 a.m. ET/ 1529 GMT)

By Johann M Cherian and Lisa Pauline Mattackal

May 28 (Reuters) - The Nasdaq breached the 17,000 level

for the first time on Tuesday, buoyed as AI darling Nvidia

jumped to a record high, even as focus shifted to key inflation

data later in the week that could sway expectations for the

Federal Reserve's rate-cut path.

Nvidia's gains lifted its fellow chip stocks, with the

Philadelphia Semiconductor Index up 1.7% as traders

returned from a holiday-extended weekend.

The Dow lagged other indexes as healthcare and

financial stocks dragged. Healthcare also led the S&P 500

subsector losses, weighed by an 8% drop in Moderna ( MRNA )

.

The possibility that the world's most influential

central bank could kick off interest-rate cuts this year has

sent Wall Street on a record-breaking rally since late 2023,

with the Nasdaq and S&P 500 marking their fifth

straight week of gains on Friday.

However, expectations for the timing of rate cuts have

see-sawed, with policymakers wary as the data still reflects

sticky inflation.

Market attention now shifts to the U.S. core Personal

Consumption Expenditures Price Index report for April later in

the week. The Fed's preferred inflation barometer is expected to

hold steady on a monthly basis.

"There has been an emerging acceptance by the investment

community that it is unlikely that the Fed will lower rates in

2024. As we anticipate the next economic data, investors will be

looking to see if those results will reinforce the changing

opinion that there will be no rate cuts this year," said Peter

Andersen, founder of Andersen Capital Management.

Odds of a rate reduction of at least 25 basis points stand

above the 50% mark only for the months of November and December

this year, according to the CME FedWatch Tool.

U.S. trading moves to a shorter settlement on Tuesday, which

regulators hope will reduce risk and improve efficiency, but is

expected to temporarily increase transaction failures for

investors.

Minneapolis Fed President Neel Kashkari said in an interview

with CNBC that the U.S. central bank should wait before cutting

interest rates, adding that it could potentially even hike rates

if inflation does not fall further.

At 11:29 a.m. the Dow Jones Industrial Average fell

130.37 points, or 0.33%, to 38,939.22, the S&P 500 gained

3.92 points, or 0.07%, to 5,308.64 and the Nasdaq Composite

gained 87.15 points, or 0.52%, to 17,008.27.

UBS Global Research raised its year-end target for the

benchmark index to 5,600 from an earlier projection of 5,400,

marking the highest forecast among major brokerages.

Apple ( AAPL ) rose nearly 0.9% after iPhone sales in China

surged 52% in April from a year earlier, Reuters calculations

based on industry data showed.

Shares of United States Cellular ( USM ) rose 3% after

T-Mobile said it would buy almost all the regional carrier's

wireless operations in a $4.4 billion deal.

GameStop ( GME ) shot up 24% after the videogame retailer

said late on Friday it had raised $933 million by selling 45

million shares as part of an "at-the-market" offering.

Advancing issues outnumbered decliners by a 1.12-to-1

ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.

The S&P 500 posted 23 new 52-week highs and eight new

lows, while the Nasdaq Composite recorded 75 new highs and 61

new lows.