Aug 29 (Reuters) - Wall Street stocks rose and the Dow hit a record high on Thursday following robust U.S. economic data, while artificial intelligence chipmaker Nvidia slipped after its largely in-line forecast failed to impress investors.
The U.S. economy grew faster than initial estimates due to strong consumer spending, the Commerce Department reported, supporting expectations the U.S. is likely to avoid a recession.
"Downward revisions to inflation accompanying an upward revision to spending builds the case for a soft landing," said Jeffrey Roach, chief economist for LPL Financial.
Nvidia's (NVDA.O), quarterly revenue forecast late on Wednesday disappointed investors used to the chipmaker beating expectations by massive margins in recent quarters.
Nvidia's stock dipped 3.2%, trimming its 2024 gain to 144%.
Notably, the Nvidia sell-off did not spread to other AI-related stocks. Microsoft (MSFT.O), gained 1.9%, while Google-owner Alphabet (GOOGL.O), added almost 1%.
Broadcom (AVGO.O), and Advanced Micro Devices (AMD.O), each rose about 1%.
"It's too early to put the bear suit on for AI related companies. We think there's still more upside," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "We see the AI revolution still in the relatively early innings and that bodes well for tech names."
Apple (AAPL.O), rose 2.5% after Citigroup named the iPhone maker its top AI pick.
The Dow Jones industrial average (.DJI), hit an all-time high, while S&P 500 index (.SPX), was less than 1% below its July record high close as expectations for a September interest rate cut remained robust.
The S&P 500 was last up 0.76% at 5,634.92 points.
The Nasdaq Composite Index gained 0.93% at 17,718.61 points, while the Dow was up 1.10% at 41,542.10 points.
Of the 11 S&P 500 sector indexes, nine rose, led by energy (.SPNY), up 1.49%, followed by a 1.46% gain in industrials (.SPLRCI), opens new tab.
A Labor Department report showed marginally lower-than-expected jobless claims for the previous week.
The June Personal Consumption Expenditures report, due on Friday, could offer hints on the central bank's monetary policy easing trajectory.
CrowdStrike (CRWD.O), gained 5.3% after the cybersecurity company beat quarterly revenue estimates, while Dollar General (DG.N), slumped 30% after slashing its annual sales and profit forecasts.
Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX), by a 4.6-to-one ratio.
The S&P 500 posted 64 new highs and four new lows; the Nasdaq recorded 81 new highs and 76 new lows.
Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai, Shounak Dasgupta and Shinjini Ganguli
