Stocks fluctuated Tuesday morning as a big boost in consumer spending in April increased the chances the Federal Reserve will implement another rate hike this summer. 

The S&P 500 was flat, the Dow Jones Industrial Average fell 0.25%, and the Nasdaq rose 0.22%.

Consumer spending in the U.S. jumped 1% in April, the biggest increase in nearly seven years, according to the Commerce Department. Strong demand for new cars and trucks and higher fuel prices led the increase. Economists had expected spending to increase 0.7%. Incomes rose 0.4%, the third increase of the year, while the savings rate slipped to 5.4% after reaching its highest level since 2012 in March.

"The overall tone of this report was very constructive, and the solid rebound in spending will likely be interpreted at the Fed as a key indication that the economic recovery has regained its footing after the missteps over the past three quarters," said Millan Mulraine, deputy chief U.S. macro strategist at TD Securities. 

U.S. stocks closed last week with their best five-day gain in weeks as Wall Street grew more comfortable with the idea of a rate hike from the Fed sooner rather than later. On Friday, Fed Chair Janet Yellen suggested the central bank could implement another rate hike this summer.

U.S. home prices rose in March as constrained supply hindered robust demand. Prices increased 0.9%, up form 0.7% a month earlier, according to the S&P Case-Shiller Home Price Index. Economists had expected prices to increase 0.8%. 

Economic activity in the Chicago area returned to contraction territory in May, according to the latest Chicago PMI data. Chicago PMI fell to 49.3 in May, its lowest level since February. Chicago PMI has been in contraction territory six times in 12 months.

Consumer confidence fell to the lowest level since late 2015 in May. The consumer confidence index slipped to 92.6 over the month, down from 94.7, as the outlook for business conditions and the U.S. jobs market slightly weakened, according to the Conference Board.

The holiday-shortened week is jam-packed with economic data including the ISM manufacturing index on Wednesday, and international trade and the U.S. jobs report for May on Friday. The European Central Bank also will convene for a monetary policy meeting with an announcement set for Thursday.

European stocks were slightly lower on Tuesday after inflation in the region remained in negative territory over the month. Inflation fell 0.1% in May, according to a flash estimate from Eurostat, slightly less than the 0.2% decline in April. May's reading shows a long way to go before inflation hits the ECB's 2% target.

Allergan (AGN) - Get Report added 1% after billionaire investor Carl Icahn disclosed he had taken a "large position" in the drugmaker. Icahn noted he was "very supportive" of CEO Brent Saunders and that Icahn Enterprises had "every confidence in Brent's ability to enhance value for all Allergan shareholders."

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SodaStream (SODA) - Get Report rose 5% after announcing a new home beer-brewing system which will first launch in Europe. The homemade soda company has partnered with light beer brand Blondie to deliver consumers the ability to create homemade beer from a concentrate pod and sparkling water through SodaStream's device.

Celator Pharmaceuticals (CPXX) surged 71% after Jazz Pharmaceuticals (JAZZ) - Get Report agreed to pay $1.5 billion for the cancer-treatment biotech company. Jazz will pay $30.25 a share for New Jersey-based Celator, nearly double its Friday close. The deal provides Jazz access to Celator's pipeline drug to treat leukemia.

Medtronic (MDT) - Get Report moved higher after topping fourth-quarter estimates on its top- and bottom-lines. The medical technology company earned an adjusted $1.27 a share in its recent quarter, a penny above estimates, while revenue jumped 4% to $7.6 billion. Medtronic expects full-year 2017 earnings between $4.60 and $4.70 a share.

Great Plains Energy (GXP) fell 4% after agreeing to purchase Westar Energy (WR) for $8.6 billion, a significant step of consolidation in the utilities sector as the two companies seek to ensure more control over consumer rates. The companies expect the deal to close in spring of 2017, pending regulatory approval.

Micron Technology (MU) - Get Report rose nearly 1% after Robert W. Baird analysts raised their rating on the stock to outperform with a $18 price target, up from neutral with a $12 target. The firm pointed to improving demand for PCs and NAND flash memory as reasons for the upgrade.