Nasdaq leads Wall St higher after GDP data; Nvidia slips
Corrects to reflect expected PCE data in paragraph 16 is for July, not June
Q2 GDP second estimate shows US economy grows 3%
CrowdStrike up after upbeat Q2 revenue
Apple gains after Citigroup selects company as top AI pick
Dollar General plunges after cutting annual forecasts
Indexes up: Dow 0.70%, S&P 0.70%, Nasdaq 1.04%
By Johann M Cherian, Purvi Agarwal and Chuck Mikolajczak
Aug 29 (Reuters) -The tech-heavy Nasdaq led Wall Street's main indexes higher on Thursday after data showed a still robust U.S. economy, while AI chip firm Nvidia slipped as its largely in-line forecast failed to meet lofty expectations of investors.
A Commerce Department report showed the U.S. economy grew faster than initial estimates, amid strong consumer spending.
"Downward revisions to inflation accompanying an upward revision to spending builds the case for a soft landing," Jeffrey Roach, chief economist for LPL Financial, said.
Markets have swung between marginal gains and losses this week 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 disappointed investors, despite upbeat second-quarter results. The chip bellwether's shares were down 3.2%.
"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.
Semiconductor peers Broadcom AVGO.O and Advanced Micro Devices AMD.O rose 1.7% and 1.1%, respectively, aiding a 1.6% 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 1.5% each.
Apple AAPL.O gained more than 2.4% after Citigroup selected the iPhone maker as its top AI pick over Nvidia. This helped the tech sector .SPLRCT gain 0.9%.
At 11:45 a.m. ET, the Dow Jones Industrial Average .DJI was up 289.54 points, or 0.70%, at 41,380.96, the S&P 500 .SPX was up 39.02 points, or 0.70%, at 5,631.20, and the Nasdaq Composite .IXIC was up 182.80 points, or 1.04%, at 17,738.82.
Communication services .SPLRCL led broader gains, with nine out of 11 sectors trading higher on the benchmark index.
"We're kind of bouncing back from fears about Nvidia and having a relief rally," said Jay Hatfield, portfolio manager at InfraCap.
The benchmark S&P 500 .SPX is about 0.6% away from a record high, while the Dow .DJI was at an all-time peak, as expectations for a September interest rate cut stayed 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 Expenditures data for July could offer hints on the central bank's monetary policy easing trajectory.
CrowdStrike CRWD.O gained 4.6% after the cybersecurity company beat quarterly revenue estimates, while Dollar General DG.N slumped 28% after slashing its annual sales and profit forecasts.
Advancing issues outnumbered decliners for a 2.66-to-1 ratio on the NYSE and a 2.22-to-1 ratio on the Nasdaq.
The S&P index recorded 50 new 52-week highs and four new lows, while the Nasdaq recorded 65 new highs and 71 new lows.
Share price gains of technology stocks since February https://reut.rs/4dHB8qz
US gross domestic product https://reut.rs/3Mrgi2K
Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai, Shounak Dasgupta and Shinjini Ganguli
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