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Nasdaq notches record high as Apple rises into earnings

  • The Nasdaq composite hit an intraday record of 6,102.72, with shares of Apple also hitting a new high ahead of earnings.
  • Fed kicked off its two-day monetary policy meeting, but market expectations for a rate hike are low.

U.S. equities closed mostly flat on Tuesday investors awaited earnings from tech giant Apple.

The Nasdaq composite hit an intraday record of 6,102.72 and eked out a closing record, with shares of Apple also hitting a new high. Apple's stock also had the most positive impact on the Nasdaq 100 index, which also reached a record high.

Apple is set to report fiscal second-quarter earnings after the bell Tuesday. One of the key metrics investors will be watching out for in those earnings is iPhone sales.

The tech giant makes most of its money from iPhones — and even if it meets estimates of 52 million, that's not a lot more than the 51 million it reported a year ago.

Apple's earnings have topped analyst expectations 15 of the past 16 quarters, while sales have missed just four times in the same time period, according to UBS research from April 24.

The Dow Jones industrial average rose about 35 points, with 3M and Visa contributing the most gains. The S&P 500 chopped around the flatline for most of the session, with information technology, industrials and health care outperforming.

"The big three events this week are the Fed Meeting, the labor figures due Friday and some of the big earnings" set for release this week, including Apple, said Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank. "So it's not surprising to see such an uninspiring session."

NYSE Trader on the floor
Spencer Platt | Getty Images
NYSE Trader on the floor

Wall Street also kept an eye on the Federal Reserve, with the central bank kicking off a two-day monetary policy meeting.

The Fed, however, is not expected to shift monetary policy when their meeting concludes. Market expectations for a rate hike following this meeting are just 4.8 percent, according to the CME Group's FedWatch tool.

That said, investors will be looking for more clues about the Fed's plan to unwind its massive $4.5 trillion balance sheet.

"The FOMC has always encountered turbulence when trying to 'land the plane.' Reducing an inventory of $4.5T of fixed income securities to something far more stable presents the biggest challenge of the most protracted and complex tightening cycle facing the central bank since its founding in 1913," said Jeremy Klein, chief market strategist at FBN Securities, in a note to clients.

The U.S. central bank raised rates at its March meeting, pushing the overnight funds rate to a target range of 0.75 percent to 1 percent.

Investors also looked ahead to a slew of economic data due later this week, including the April jobs report, which is due Friday.

"We have some more data later this week, so I'd expect [relative] volatility to pick up in the coming days," said Matt Weller, senior market analyst at Faraday Research.

Equities closed mixed on Monday after a brief shock stemming from President Donald Trump's comments on breaking up the big banks. In an interview with Bloomberg, Trump said he was "looking at that right now."

Stocks declined sharply after Trump's remarks but managed to rebound.

Meanwhile, the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, hit its lowest level since February 2007 on Monday, falling as low as 9.90.

"That seems pretty alarming, but if you look beyond the headlines, the Vix sustained those levels for most of 2004 and 2005," said Faraday's Weller. "So it may not be indicative that a top is near."

In economic news, automakers released their U.S. April sales numbers throughout the day. Total sales hit 16.88 million for April, below an expected annual rate of 17.2 million.

In Europe, equities closed higher, with the pan-European Stoxx 600 index rising 0.75 percent amid solid economic data. Investors in the region also looked ahead to a runoff in the French presidential election between centrist Emmanuel Macron and far-right candidate Marine Le Pen.

"If Le Pen were to somehow win, I think you'd see a downside move without the bounce," said Patrick Kaser, portfolio manager at Brandywine Global. "It would be a risk-off event."

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S&P 500
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The Dow Jones industrial average rose 36.43 points, or 0.17 percent, to close at 20,949.89, with Intel leading advancers and Procter & Gamble lagging.

The S&P 500 gained 2.84 points, or 0.12 percent, to end at 2,391.17, with industrials leading six sectors higher and consumer staples underperforming.

The Nasdaq rose 3.76 points, or 0.06 percent, to close at 6,095.37.

Advancers and decliners were about even at the New York Stock Exchange, with an exchange volume of 908.88 million and a composite volume of 3.796 billion at the close.

—CNBC's Anita Balakrishnan contributed to this report.

On tap this week:

Tuesday

Earnings: Apple, WebMD, Weight Watchers, Devon Energy, Etsy, Gilead Sciences, Newfield Exploration, Anadarko Petroleum, Cummins, Allstate, Becton Dickinson

April vehicle sales

Two-day Fed meeting begins

Wednesday

Earnings: Facebook, Time Warner, Volkswagen, AIG, Kraft Heinz, MetLife, Tesla Motors, Avis Budget, Tableau Software, Pioneer Natural Resources, Yamana Gold, Estee Lauder, Southern Co, Garmin, Sprint, Wellcare Health, Molson Coors Brewing, Humana, Cheesecake Factory, Fitbit, MetLife, Groupon

8:15 a.m. ADP payrolls

9:45 a.m. Services PMI

10:00 a.m. ISM non-manufacturing

2:00 p.m. Fed decision

Thursday

Earnings: A-B InBev, Occidental Petroleum, Royal Dutch Shell, Adidas, Kellogg, Viacom, Beazer Homes, AMC Networks, Siemens, Dunkin Brands, Chesapeake Energy, Marathon Oil, Allscripts Healthcare, El Pollo Loco, Shake Shack, PerkinElmer, Zynga, Zillow, Wageworks, DeVry Education, CBS, Activision Blizzard, Herbalife

8:30 a.m. Jobless claims

8:30 a.m. Trade deficit

8:30 a.m. Productivity

8:30 a.m. Unit labor costs

10:00 a.m. Factory orders

Friday

Earnings: TransCanada, Cognizant Tech, Moody's, Cigna, CenterPoint

8:30 a.m. Nonfarm payrolls

3:00 p.m. Consumer credit

11:30 Fed Vice Chairman Stanley Fischer at Hoover Institution Monetary Policy Conference

12:45 a.m. San Francisco Fed President John Williams

1:30 p.m. Chicago Fed President Charles Evans, Boston Fed President Eric Rosengren, St. Louis Fed President James Bullard on panel at Hoover Institution

1:30 p.m. Fed Chair Janet Yellen in webcast from Brown University at event on 125 Years of Women at Brown