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Indexes: Dow up 0.3%, S&P 500 off 0.1%, Nasdaq down 0.6%

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Alphabet up after report on talks with Meta to supply AI

chips

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Nvidia ( NVDA ), AMD lead declines after Alphabet report

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Retail sales, producer inflation data in focus

(Updates at 10:17 a.m. ET)

By Johann M Cherian

Nov 25 (Reuters) - The S&P 500 and Nasdaq fell on

Thursday, as Nvidia's ( NVDA ) shares tumbled on concerns over

intensifying competition in the AI chip space, while investors

digested mixed economic data delayed by the U.S. government

shutdown.

Alphabet's shares rose 2.7% after the Information

reported Facebook-parent Meta Platforms was in

discussions to use Google's AI chips in its data centers from

2027 and rent chips from Google Cloud by next year.

Nvidia ( NVDA ), which currently dominates the AI chips

sector, dropped 6.7% to a two-month low, while Advanced Micro

Devices ( AMD ) fell 9%.

The Philadelphia SE Semiconductor index dropped 3%,

having bounced 4.6% on Monday.

"There's a false expectation that there's only one chip

company out there and no one else is working in terms of

competition and we've got a headline to remind us that that's

just not the case," said Phil Blancato, CEO of Ladenburg

Thalmann Asset Management in New York.

The Nasdaq logged its biggest one-day gain in six months on

Monday, as investors scooped up tech stocks following several

bouts of selling in recent weeks driven by worries of stretched

valuations in the sector and high AI spending by large

companies.

The S&P 500 and Nasdaq are on course to record their worst

monthly performances since March.

By 10:17 a.m. ET, the Dow Jones Industrial Average

rose 131.79 points, or 0.29%, to 46,583.58. The S&P 500

fell 8.75 points, or 0.13%, to 6,696.37 and the Nasdaq Composite

fell 126.39 points, or 0.56%, to 22,744.50.

DELAYED DATA TRICKLES IN

A Commerce Department report showed retail sales increased

0.2% in September, less than the 0.4% rise that economists

polled by Reuters were anticipating.

A separate report showed producer prices rebounded in

September as the cost of energy goods surged and producers

passed on some tariffs.

Trader bets for an interest rate cut of 25 basis points next

month were little changed following the data and were last at an

83% chance, doubling from around 40% last week, according to the

CME Group's FedWatch Tool.

Market sentiment has recently been supported by growing bets

the Federal Reserve will lower borrowing costs in December

following dovish remarks by voting members on the Federal Open

Market Committee such as John Williams and Christopher Waller.

"Some of the data is suggesting the economy is slowing. It

does give the Fed the first piece of data to think about cutting

at least," said Blancato.

Meanwhile, the hunt for the next Fed Chair was on, with

Treasury Secretary Scott Bessent saying the announcement could

come as soon as pre-Christmas.

Eight of the 11 major S&P 500 sectors were higher, with

communication services and healthcare indexes

leading gains.

Retailers got a lift too after department store operator

Kohl's jumped 34% and clothing retailer Abercrombie &

Fitch ( ANF ) surged 28%, with both companies raising their

annual earnings forecasts.

Apparel retailer Burlington Stores ( BURL ) tumbled 10.5%

after its third-quarter revenue missed estimates.

U.S.-listed shares of Alibaba slipped 2.3%,

reversing early gains after the Chinese e-commerce giant beat

analysts' estimates for quarterly revenue.

On the Nasdaq, advancing issues outnumbered decliners by

about a 1.45-to-1 ratio and a 2.3-to-1 ratio on the NYSE.