Stocks rose Tuesday following the release of fresh U.S. economic data, while investors waited for another key inflation report.

The Nasdaq Composite gained 0.75% and notched a fresh closing record of 16,511.18. The Dow Jones Industrial Average added 126.60 points, or 0.32%, to end at 39,558.11. The S&P 500 added 0.48%, closing at 5,246.68.

The producer price index reading for April came in above estimates, putting a damper on expectations that the Federal Reserve would begin cutting rates later this year. The PPI gained 0.5% from the prior month, higher than the 0.3% that economists polled by Dow Jones had anticipated.

The market's initial reaction was negative, but moves were contained as the March wholesale prices reading was revised down to show a 0.1% decline. That was enough to ease concerns about stubbornly high prices. Traders may also be hesitant to overreact to this report ahead of the more closely followed consumer price index, due to be released Wednesday.

At this point, some investors may not have fully priced in the possibility that inflation will persist at these higher levels, said Megan Horneman, chief investment officer at Verdence Capital Advisors.

"The market is a little bit complacent — they've gotten accustomed to dovish rhetoric from Powell," she said. "In our opinion, the longer this market continues to ignore what's going on in the inflation category, the bigger decline we can see at some point."

Traders also reacted to comments from Federal Reserve Chair Jerome Powell, who said on Tuesday that the U.S. central bank will need to practice patience in the face of higher-than-expected inflation.

The Dow is coming off its first losing session in nine, snapping its longest winning streak since December. The S&P 500 also inched lower on Monday, while the Nasdaq rose slightly. Stocks were pressured by a Monday report from the New York Federal Reserve that consumers' expectations for inflation over the short and long term grew in April.

Nasdaq Composite closes at new record high

U.S. stocks closed higher on Tuesday afternoon.

The Nasdaq Composite jumped to a new closing high, adding 0.75% to settle at 16,511.18. The S&P 500 gained 0.48% to finish at 5,246.68, while the Dow Jones Industrial Average added 126.60 points, or 0.32%, closing at 39,558.11.

— Lisa Kailai Han

Inflation is persisting at levels too high to justify rate cuts this year, according to strategist

The Federal Reserve is unlikely to cut rates this year, according to Verdence Capital Advisors' Chief Investment Officer Megan Horneman.

While Horneman also views a rate hike as unlikely, she believes the U.S. central bank will be forced to keep rates on hold for the remainder of the year as inflation persists.

"It's a problem that they've exacerbated by taking such a dovish tone and — as early as last year — letting the markets price in so many rate cuts," she said. "They really need to get these markets to be more realistic on where interest rates are going to go."

— Lisa Kailai Han

Negative economic surprises will eventually drag stocks down, Citi says

The market has reacted positively to negative economic surprises in recent times, but Citi believes this "bad news is good news" narrative will soon change.

"Seasonally, surprises tend to trough around now and, with Fed hikes off the table for the near future, good economic news will likely be welcomed by risky assets," wrote analyst Nathaniel Rupert.

He added, "However, with cracks appearing in the labor market, more below-consensus data would eventually weigh on equities (even though the first cut may be viewed positively), as would a tightening in financial conditions in our view."

— Lisa Kailai Han

S&P 500 can see summer rally, recover quarterly losses: BofA

There is reason to believe the S&P 500 could be in for a summer rally and that the recent pullback will be just a blimp, according to Bank of America.

"If the SPX follows bullish seasonality and positive breadth signals, the index should embark on a summer rally," Stephen Suttmeier, the firm's technical research strategist, wrote to clients on Tuesday. "This suggests that the April into May corrective phase is likely a bullish continuation pattern."

Despite a tough start to the second quarter, a recent return to gains has pushed the broad index just 0.2% off its flatline for the three-month period. The index is up nearly 10% on the year.

— Alex Harring

Paramount Global shares slide on CNBC report that Sony is 'rethinking' acquisition

Paramount Global fell more than 7% after a report from CNBC's David Faber that Sony is "rethinking" its offer to buy the company.

Sony and Apollo sent a letter earlier this month to Paramount Global's board expressing interest in an all-cash $26 billion offer for the company. Sony would be the majority shareholder and Apollo a minority stakeholder.

Many of Paramount Global's common shareholders publicly supported the Sony-Apollo offer over a competing bid from Skydance Media, which did not pay as large of a premium to as many class B shareholders.

The Paramount Global special committee said on May 3 that it would end exclusive talks with Skydance Media and its two private equity backers, KKR and RedBird Capital, to examine the Sony-Apollo bid.

— Alex Sherman

OpenAI event 'raises the bar' on AI chatbots, Bank of America says

OpenAI's Monday event highlighting its new desktop app and some refreshes "raises the bar, again, for consumer chatbots," according to Bank of America analyst Vivek Arya.

He wrote in a Tuesday note that the event "ups the ante for AI assistant," adding that semiconductor stocks should see multiyear growth tailwinds from the computing and networking capabilities needed to appease the expanding artificial intelligence use cases.

Analyst Wamsi Mohan also highlighted Apple as a potential beneficiary from OpenAI and multimodal assistants and the potential productivity gains.

"Much of the demo used a 'hardwired' iPhone to lower latency of real time interaction," he wrote. "Maintain Buy on benefits from GenAI at edge with gross margin upside and momentum in Services."

Even so, Rosenblatt's Barton Crockett views the event as a potential competitive pressure point for Alphabet ahead of its Google I/O event. The developments also seem to turn up the head on Apple, which has struggled for years to create similar capabilities for its Siri component, he added.

"We suspect that Apple is nowhere near, internally, to what OpenAI just demoed," he wrote. "If Google can't show an ability to match OpenAI at I/O, then Apple will be under meaningful pressure we believe to partner with OpenAI to modernize Siri for the current state of AI."

— Samantha Subin

6 stocks in the S&P 500 hit new 52-week highs

During Tuesday's trading session, 24 stocks in the S&P 500 hit new 52-week highs.

Of these names, six stocks reached new intraday highs. Here are the names that met this milestone:

• Aflac Inc. trading at all-time-high levels back through our history in 1973
• Brown & Brown trading at all-time highs back to when it became publicly traded on the New York Stock Exchange in 1997
• Goldman Sachs trading at all-time-high levels back to its initial public offering in May 1999
• Analog Devices trading at all-time highs back through our history to 1972
• NXP Semiconductors trading at all-time highs back to its IPO in August 2010
• Welltower trading at all-time-high levels back to its incorporation as Health Care REIT in 1985

— Lisa Kailai Han, Christopher Hayes

AMC, GameStop slip from highs of the day

Meme stocks were losing steam in early afternoon trading and hovering well below their highs of the day.

Shares of GameStop were last up 33.7% for the day at $40.72 per share. The stock's high of the day came at the opening bell, when it hit $64.83 per share.

AMC Entertainment has similarly cooled off. The stock was last up 23.7% at $6.42 per share. It traded as high as $11.88 per share Tuesday morning.

— Jesse Pound

On Holding rallies on earnings

On Holding shares headed for their best day in more than a year following a strong earnings report.

The shoemaker climbed nearly 17.5% in midday trading. If that holds through close, it will mark the stock's biggest one-day gain since March 2023, when the stock soared more than 26% in a session.

Tuesday's jump came after the Swiss company posted adjusted earnings per share and net sales that were both higher than forecast by analysts polled by FactSet. On has also benefited from demand for more comfortable clothing such as padded shoes.

— Alex Harring

See the stocks moving midday

These are some of the stocks making the biggest moves midday:

• Alibaba — The Chinese technology company shed 7% after posting an 86% drop in net income from a year ago for its fiscal fourth quarter. Elsewhere, revenue topped expectations.
• Sony — U.S.-listed shares jumped 5.3% after quarterly revenue came in at 3.5 trillion yen, above the consensus expectation of 2.89 trillion yen from analysts polled by LSEG. However, operating profits came in lower than analysts forecast.
• Vodafone — U.S. shares popped 5% after the U.K.-based telecommunications company posted full-year profit that beat expectations.

Click here for the full list.

— Alex Harring

Energy stocks lagging behind the broader market

The energy sector underperformed the S&P 500 on Tuesday, pulling back around 0.5% while the broad market index gained 0.2%. Marathon Petroleum led Tuesday's downturn, declining 3.7%.

Month to date, energy and consumer staples are neck and neck for worst-performing sectors. Both groups are down nearly 0.8%.

— Hakyung Kim

Credit card delinquencies rise to nearly 13-year high

Credit card default rates hit their highest level in nearly 13 years at the beginning of 2024, the New York Federal Reserve reported Tuesday.

The central bank's Quarterly Report on Household Debt and Credit showed the share of "seriously delinquent" debt, or at least 90 days behind, rose to 6.86% of outstanding balances in the first quarter of 2024, the highest since Q2 of 2011. At the same time, auto delinquencies moved to 2.78%, the highest since Q2 of 2010.

Those increases came even though total credit card balances fell to $1.12 trillion, a decline of $14 billion. However, total consumer debt rose to $17.69 trillion, an increase of $184 billion, or 1.1%.

— Jeff Cox

U.S. federal debt boosts economy short term but poses long-term challenges, Wolfe Research says

Although U.S. federal debt boosts the economy in the short term, Wolfe Research foresees it posing key risks to the market over time.

"We expect transfer payments, the CHIPS Act, the IRA, and infrastructure spending to continue to provide fiscal tailwinds for the economy and stock prices in the quarters ahead," wrote chief investment strategist Chris Senyek. "However, the huge problem is that U.S. federal debt is on an unsustainable long-term trajectory! More specifically, the CBO projects that publicly held federal debt will reach an all-time high in 2029!"

Senyek noted two specific key risks.

For one, "bond vigilantes" could push back, ultimately sending yields higher. Additionally, interest payments could also squeeze out spending faster than expected, the analyst added.

— Lisa Kailai Han

Powell says Fed will 'need to be patient' on inflation

Federal Reserve Chair Jerome Powell said Tuesday that inflation data this year has been disappointing and will require patience from the central bank on monetary policy.

"We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected," he told a bankers' group in Amsterdam. "So what that has told us is that we'll need to be patient and let restrictive policy do its work."

— Jeff Cox

Wheat futures hit highest prices since July 2023

Wheat prices hit their highest level since July 31, 2023, during early morning trading on Tuesday.

The commodity's July-dated futures briefly hit a high of 696 cents per bushel. Last July, wheat had traded at as high as 703 cents.

Wheat prices rose after frosts damaged crops in Russia, the country that exports the most wheat globally.

— Lisa Kailai Han, Gina Francolla

Stocks open little changed

Stocks opened little changed on Tuesday morning, following April's hotter-than-expected reading of the producer price index.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all trading near flat shortly after market open.

— Lisa Kailai Han

Stocks moving before the bell

Here are some of the stocks making moves in premarket trading:

Meme stocks — GameStop jumped 119%, adding to Monday's 74.4% gain, after the man who fueled the 2021 GameStop frenzy, "Roaring Kitty," posted online for the first time in about three years. AMC soared 105%, while Reddit and Robinhood rose 4.6% and nearly 7%, respectively.

Alibaba — U.S.-listed shares dropped 4% after the Chinese e-commerce retailer reported an 86% drop in profits for its fiscal fourth quarter. However, Alibaba beat revenue expectations.

Sony — The PlayStation maker's U.S.-listed shares added 3.5% after posting quarterly revenue of 3.5 trillion yen, topping the LSEG consensus estimate of 2.89 trillion yen. Operating profits came in lighter than expected.

— Michelle Fox

Producer price index rises more than expected

The producer price index rose more than expected in April, raising concerns that the Federal Reserve will not be able to cut rates as soon as expected. The PPI rose 0.5% last month. Economists polled by Dow Jones expected a 0.3% increase in PPI.

However, March's PPI reading was revised to a 0.1% decline.

— Fred Imbert

Copper stocks rise after metal hits 2022 high

Copper stocks popped in Tuesday's premarket as the metal reached multiyear highs.

The Global X Copper Miners ETF (COPX) advanced more than 1% before the bell, putting the fund on pace for its fourth straight positive session. That leg up comes as CME Copper and LME Copper touched their highest levels going back to March and April of 2022, respectively.

— Alex Harring, Gina Francolla

The U.S. economy still looks 'too hot,' according to Barclays

Of the potential scenarios for the macroeconomy in the latter half of 2024, it is most likely that the U.S. will not see any sharp weakening in the near term.

"There are several possible paths for the US macro-economy going forward. … A second is that the US is still too hot, in which case higher yields and a stronger USD pose challenges for markets," wrote Barclays analyst Ajay Rajadhyaksha. "We think the second is most likely; more importantly, markets seem very convinced of just one of these three outcomes."

Rajadhyaksha added that at least for the time being, he prefers staying in cash assets.

— Lisa Kailai Han

Home Depot earnings and revenue fall for fifth straight quarter

Home Depot earnings topped Wall Street estimates for the sixteenth quarter in a row. Despite that, earnings per share fell 5% from a year ago, the fifth straight quarter of year-over-year declines. That also comes after earnings fell more than 6% in the year-ago quarter, with earnings now down 11% from two years ago.

The home improvement retailer posted its third revenue miss in the past six quarters. Revenues are now down 6% from two years ago after falling 2.3% in the just-completed quarter and declining 4.2% in the year-ago period.

Meanwhile, same-store sales dropped 2.8% in the latest quarter on lower average ticket and customer transactions. CEO Ted Decker cited a "a delayed start to spring and continued softness in certain larger discretionary projects." It was the third consecutive quarter that both average ticket and transactions fell, with the number of transactions contracting on a year-over-year basis for the 12th consecutive quarter.

— Robert Hum

Home Depot revenue misses, shares slip

Home Depot shares were down nearly 1% after the home improvement giant reported weaker-than-expected revenue for the first quarter.

The company's top line came in at $36.42 billion. Analysts had forecast revenue of $36.66 billion, per LSEG. That said, the company reaffirmed its full-year guidance.

"The home improvement customer is extremely healthy from a financial perspective," Chief Financial Officer Richard McPhail told CNBC. "And so it's not the case of not having the ability to spend. What they tell us is they're just simply deferring these projects as given higher rates, it just doesn't seem the right moment to execute."

— Fred Imbert, Melissa Repko

SoftBank shares jump more than 4% as Vision Fund posts first annual gain in 3 years

Shares of Japanese investment group Softbank Group Corp. climbed more than 4% on Tuesday as the company's Vision Fund posted its first annual gain in three years.

Softbank posted a gain of 724.3 billion Japanese yen, or $4.6 billion, on its Vision Fund in the fiscal year that ended in March.

But for the full year, SoftBank recorded an overall loss of 227.6 billion yen, narrower than the loss of 970.1 billion yen from the previous fiscal year.

Revenue climbed 2.8% year on year to 6.76 trillion yen, up from the 6.57 trillion yen in the same period last year.

The company also announced a full-year total dividend of 44 yen per share, and expects the same level of dividends for its 2024 financial year.

— Lim Hui Jie, Arjun Kharpal

Daiwa Securities shares fall 5% after news of its stake in Aozora Bank

Daiwa Securities Group shares tumbled more than 5% in early trading after the Japanese brokerage firm said it would take a stake in Aozora Bank.

Shares of Aozora Bank jumped 5% before paring gains to trade around 0.1% higher in late morning trade.

The companies said in a filing on Monday that Daiwa will roughly take a 15.38% stake in Aozora for about 51.9 billion yen, or $331.8 million.

— Shreyashi Sanyal

Japan's import prices jump 6.4% in April amid yen weakness

Data from the Bank of Japan showed that corporate inflation was steady in April compared to a year earlier, but import prices jumped last month.

Import prices in April rose 6.4% year over year amid weakness in the yen. This was the biggest jump in import prices since March 2023.

Japan's corporate goods price index (CGPI), or producer prices, rose 0.9% year over year last month, the same as in March. The reading was slightly higher than the Reuters poll forecast of a 0.8% increase.

The CGPI is a measure of the prices companies charge one another for their goods and services.

— Shreyashi Sanyal

India's April consumer inflation largely meets expectations at 4.83%

India's consumer price index grew 4.83% year on year in April, down marginally from the 4.85% recorded in March and slowing for a fourth straight month.

While it was the slowest rate of inflation since June 2023, the figure was slightly above the 4.8% expected by economists polled by Reuters.

India's statistics ministry said inflation in rural areas grew more sharply at 5.43%, while the urban inflation rate came in at 4.11%.

The ministry also added that inflation cooled in clothing and footwear, housing and fuel from the previous month.

— Lim Hui Jie

These dividend payers could see a bump from AI hype, Wells Fargo says

Utilities, best known for their steady dividend payments, are enjoying a surge in popularity due to excitement around artificial intelligence.

Consider that the Utilities Select Sector SPDR Fund (XLU) is up 6.8% in May alone, outperforming the Technology Select Sector SPDR Fund (XLK), which is up 5.2% this month.

Here is how the utilities AI play goes: AI data centers are going to require a significant amount of electricity, and even as tech companies turn toward renewable energy sources, natural gas will play a key part in backing up those power needs.

See here for a list of dividend-paying utilities that could benefit from AI excitement, per Wells Fargo.

— Darla Mercado

GameStop, AMC extend gains after hours

Shares of meme stock favorites GameStop and AMC soared in extended trading on Monday, following sharp moves earlier in the day spurred by the reemergence of "Roaring Kitty."

GameStop stock climbed more than 7%, while AMC soared nearly 15%. Trading in the brick-and-mortar video game retailer was interrupted several times on Monday due to increased volatility.

— Brian Evans

Games Global Limited postpones IPO

Games Global Limited is postponing its initial public offering planned for May 14, the company said on Monday.

The online casino game supplier said concerns over market conditions underpinned the decision. Games Global plans to issue 14.5 million shares priced at $16 to $19 per share.

— Brian Evans

Stock futures are little changed on Monday

Stock futures were little changed on Monday with investors looking toward two key inflation reports this week.

S&P 500 futures fell 0.06%, while Nasdaq 100 futures slipped 0.07%. Dow Jones Industrial Average futures pulled back 15 points, or 0.04%.

— Brian Evans