US STOCKS-S&P 500 dips as chip stocks give up gains

The Nasdaq declined 0.15% to 25,799.74 points, while the Dow Jones Industrial Average was down 0.55% at 49,638.38 points. A relentless rally in technology and AI shares has helped push ⁠U.S. stocks to record highs in recent days as investors cheer signs of strong demand for artificial intelligence and a robust earnings season.

The S&P 500 dipped ‌on ​Thursday, with Intel and other chip stocks retreating after a recent rally, while uncertainty around U.S.-Iran peace talks weighed on the wider market.

U.S.-listed shares of Arm Holdings dropped 10% as worries about the company's ability to secure sufficient supplies for its ‌new AI chip overshadowed a strong earnings forecast. Intel fell 1.9% and Advanced Micro Devices declined 3.1%, giving back some of their gains from earlier this week.

The PHLX chip index lost 2.4%, trimming its gain so far this quarter to 45%. The United States and Iran were edging toward a temporary agreement to halt their war, sources and officials said, ‌with Tehran reviewing a proposal that would stop the fighting but leave the most contentious issues unresolved.

"You can have a string of days like this, and ‌that's not going to take away from the fact that this has been a rip-roaring quarter of recovery, driven by fundamentals," said Mike Dickson, head of portfolio management at Horizon Investments in Charlotte, North Carolina. Oil prices fell 1%, bouncing off session lows in volatile trading.

The S&P 500 energy index led declines among the major sectors with a 2.3% drop. Nvidia and Microsoft both rose more than 2%, underscoring investor confidence ⁠in Wall ​Street's heavyweight AI companies.

The S&P 500 was down ⁠0.40% at 7,335.96 points. The Nasdaq declined 0.15% to 25,799.74 points, while the Dow Jones Industrial Average was down 0.55% at 49,638.38 points.

A relentless rally in technology and AI shares has helped push ⁠U.S. stocks to record highs in recent days as investors cheer signs of strong demand for artificial intelligence and a robust earnings season. S&P 500 companies are on track for their strongest ​profit growth in more than four years. Upbeat economic readings in recent weeks have also helped allay concerns about the economy.

Data showed the number ⁠of Americans filing claims for unemployment benefits rose less than expected last week. After a strong private payrolls report on Wednesday, investors are awaiting more comprehensive nonfarm payrolls data on Friday, with jobs seen increasing by ⁠62,000 ​in April after rebounding 178,000 in March, according to a Reuters poll of economists.

Traders continued to bet the U.S. Federal Reserve would hold interest rates steady through the end of the year due to a resilient labor market and elevated energy prices. Cleveland Fed President Beth Hammack said she expects the central bank to hold ⁠interest rates steady well into the future as it navigates a climate of considerable uncertainty.

Cybersecurity stocks surged after Datadog raised its full-year earnings forecast. Datadog surged 29%, ⁠while peers CrowdStrike and Palo Alto Networks ⁠added 7% and 5.5%, respectively. Whirlpool slumped 13% after the home-appliance maker missed first-quarter sales estimates and suspended its dividend.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.7-to-one ratio. The S&P 500 posted 18 new highs and 10 new lows; ‌the Nasdaq recorded 126 new ‌highs and 83 new lows.