Major U.S. indexes closed mixed on Tuesday as stronger-than-expected inflation data and the fragility of the U.S.-Iran ceasefire prompted investors to take profits near the end of a strong first-quarter earnings season.

Economic data showed consumer prices rose at a faster pace than analysts had predicted last month, as the Strait of Hormuz remained closed due to the war with Iran, disrupting crude oil supplies.

The Iranian war, now in its eleventh week, shows no signs of an imminent resolution. President Trump declared the ceasefire on the verge of collapse after Tehran rejected a US proposal to end the conflict, insisting on a list of demands that Trump dismissed as nonsense.

Performance of major US stock market indices:

The Dow Jones index rose 0.1%, or 56 points, on Tuesday, marking its third consecutive daily gain.

While the S&P 500 index fell by about 0.2% to give up its record high, it remained above the 7400 point level at the close.

The Nasdaq Composite Index also fell by 0.7%, giving up its record high, but remained above the 26,000 point level at the close.

Weak technology stocks led to a significant decline in the Nasdaq index, while healthcare stocks, boosted by a surge in Humana shares, helped keep the Dow Jones index in positive territory.

Humana's stock jumped by about 8% after Bernstein raised its target price by 36%.

The likelihood of a continued trade dispute increases the probability that higher energy prices will lead to broader and more entrenched inflation. This has effectively dashed hopes for an interest rate cut this year under the expected chairmanship of Kevin Warsh, whose nomination to the Federal Reserve was confirmed by the US Senate on Tuesday.

The odds of an interest rate hike are increasing. Financial markets are pointing to a 30.5% probability that the central bank will raise its target federal funds rate by 25 basis points in December, up from 21.5% on Monday, according to the Chicago Board of Trade's FedWatch tool.

Walmart stock:

Walmart's stock rose 2.2% on Tuesday to close above $130, adding $22 billion to the company's market value in a single day.

These gains came after Bernstein raised its price target for the retail giant's stock from $134 to $145 while maintaining an outstanding rating.

Bernstein said the economic stimulus measures included in the comprehensive Golden Package Act will boost sales momentum at many retailers targeting high-income consumers.

As for low-income consumers, any gains are likely to be offset by higher fuel costs, general inflation, and cuts to subsidy programs.

Analysts surveyed by FactSet expect the company to report earnings of 66 cents per share for the quarter ending in April, a 7.8% year-over-year increase.
Walmart will announce its results on May 21, before the stock market opens.

GameStop shares:

GameStop shares fell by about 4% on Tuesday, marking their second consecutive daily loss and closing at their lowest level in a month and a half.

These losses came after eBay rejected a $56 billion takeover bid from the much smaller GameStop, citing doubts about the financing and describing the offer as unreliable and unattractive.

The chairman of eBay also pointed to concerns about the impact of the offer on the company's long-term growth, and the leadership structure of the potential merged company.