Aug 29 (Reuters) - Wall Street's main indexes rose on Thursday, as investors were relieved after data showed a still robust U.S. economy, while Nvidia slipped as its largely in-line forecast failed to exceed lofty expectations for the AI chip firm.
A commerce department report showed the U.S. economy grew faster than the initial estimates, amid strong consumer spending.
"The economy is not slipping into a recession anytime soon and that's beneficial for the stock market, along with a rate cut that's very likely coming in September," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
Markets have seesawed between marginal gains and losses in the run-up to Nvidia's results, as traders waited to see if the company would sustain its unmatched revenue growth.
Nvidia's (NVDA.O), largely in-line revenue forecast for the current quarter despite upbeat second-quarter results disappointed investors. The chip bellwether's shares were down 2.0%.
"This is the first time that there has been criticism of the estimates beat and the outlook raise. It is not as great as some investors had anticipated," said Peter Andersen, founder of Andersen Capital Management.
Although, semiconductor peers Broadcom (AVGO.O), and Advanced Micro Devices (AMD.O), rose 1.7% and 0.9%, respectively, aiding a 1.2% rise in the Philadelphia SE Semiconductor index (.SOX).
Nvidia's heavyweight megacap customers, which have been the focus of market euphoria on the prospect of artificial intelligence integration boosting corporate profits also rose with Microsoft (MSFT.O), Meta (META.O), and Alphabet (GOOGL.O), up more than 0.9% each.
Apple (AAPL.O), gained more than 2% after Citigroup selected the iPhone maker as its top AI pick over Nvidia. This helped the tech sector (.SPLRCT), lead sectoral gains with a 0.9% rise.
At 9:48 a.m. ET, the Dow Jones Industrial Average (.DJI), was up 41.92 points, or 0.10%, at 41,133.34, the S&P 500 (.SPX), was up 20.41 points, or 0.36%, at 5,612.59, and the Nasdaq Composite (.IXIC), was up 156.60 points, or 0.89%, at 17,712.62.
The benchmark S&P 500 (.SPX), is about 1% away from a record high, while the Dow (.DJI), is hovering around an all-time peak, with expectations for a September rate cut staying robust.
Odds of a reduction of 25 basis points in September stand at 67.5%, while those of a larger 50 bps cut are at 32.5%, according to CME Group's Fed Watch Tool.
A Labor Department report showed jobless claims were marginally lower than expected for the previous week.
Friday's Personal Consumption Expenditure data for June, could offer hints on the central bank's monetary policy easing trajectory.
Dow-component Salesforce (CRM.N), beat Wall Street expectations for second-quarter results, sending the enterprise cloud firm's shares up 1.1%.
CrowdStrike (CRWD.O), dropped 6.7% after the cybersecurity company cut its revenue and profit forecasts in the aftermath of last month's global tech outage.
Advancing issues outnumbered decliners by a 1.52-to-1 ratio on the NYSE and by a 1.46-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and 4 new lows, while the Nasdaq recorded 27 new highs and 41 new lows.
Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai, Shounak Dasgupta and Shinjini Ganguli
