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US moves towards faster stock settlement

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Apple ( AAPL ) gains on strong iPhone sales in China

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Indexes: Dow down 0.7%, S&P 500 down 0.1%, Nasdaq up 0.5%

(Updates to 2:15 p.m. ET)

By Abigail Summerville

NEW YORK, May 28 (Reuters) - The Nasdaq rose past the

17,000 level on Tuesday for the first time ever as AI leader

Nvidia ( NVDA ) hit a record high, while investors awaited U.S. inflation

data this week that could sway expectations for Federal Reserve

rate cuts.

The Dow and S&P 500 slipped, with the S&P 500 pressured

by declines in healthcare, industrials and

financials.

The U.S. core Personal Consumption Expenditures Price

Index report for April is due later this week. The Fed's

preferred inflation barometer is expected to hold steady on a

monthly basis.

Nvidia ( NVDA ) shares gained more than 6% and lifted other chip

stocks, with the Philadelphia Semiconductor Index up 1.7%

as traders returned from a holiday-extended weekend.

"In terms of today's price action, it's all about

technology and the winners continue to be the winners,

specifically Nvidia ( NVDA ). Today's tape is a function of positive

stories having some stock specific impact, but overall, as you

can see from the Dow being down around 200 points, it's a

generally sloppy overall market session," said Michael James,

managing director of equity trading at Wedbush Securities in Los

Angeles.

The Dow Jones Industrial Average fell 278.04

points, or 0.71%, to 38,791.55, the S&P 500 lost 4.37

points, or 0.08%, to 5,300.35 and the Nasdaq Composite

gained 81.68 points, or 0.48%, to 17,002.47.

Wall Street has been hitting records recently as investors

bet the U.S. central bank could kick off interest-rate cuts this

year.

Expectations for the timing of rate cuts have see-sawed,

with policymakers wary as data still reflects sticky inflation.

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. The odds of a

September rate cut fell to around 46% from over 50% a week ago.

The retail sector will also be in focus this week, with

several retailers like Dollar General ( DG ), Advance Auto Parts ( AAP )

and Best Buy ( BBY ) reporting earnings.

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.

Hess shareholders

approved

the $53 billion merger with Chevron ( CVX ). Hess shares

were last down 0.9%, while Chevron ( CVX ) shares were up 0.5% and Exxon

Mobil ( XOM ) shares were up 0.8%.

Apple ( AAPL ) shares rose 0.2% after iPhone sales in China

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

based on industry data showed.

GameStop ( GME ) shot up 21.5%. Late on Friday, the

videogame retailer said it had raised $933 million by selling 45

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

Declining issues outnumbered advancers by a 1.6-to-1

ratio on the NYSE and by a 1.38-to-1 ratio on the Nasdaq.

The S&P 500 posted 23 new 52-week highs and nine new lows,

while the Nasdaq Composite recorded 82 new highs and 87 new

lows.