(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

*

PDD Holdings ( PDD ) slumps after quarterly revenue miss

*

Oil companies up on supply disruption fears, Middle East

tensions

*

Boeing ( BA ) slips as NASA picks SpaceX over Starliner

*

Indexes: Dow up 0.02%, S&P 500 off 0.41%, Nasdaq down

0.94%

(Updated at 11:47 a.m. ET/ 1547 GMT)

By Johann M Cherian and Purvi Agarwal

Aug 26 (Reuters) -

The S&P 500 and the Nasdaq dropped in choppy trading on

Monday, weighed by AI-favorite Nvidia ( NVDA ) ahead of its results later

in the week, while markets awaited a key inflation report and

cemented bets on an imminent interest-rate cut by the Federal

Reserve.

Nvidia ( NVDA ) dropped 2.3%, leading declines among

chip stocks and sending the Philadelphia SE Semiconductor index

down 2.5% ahead of the chip designer's highly anticipated

earnings on Wednesday. The broader Technology sector

also lost over 1%.

Markets have been less forgiving this quarter of highly

valued megacap stocks, which spearheaded the excitement around

artificial intelligence.

Nvidia's ( NVDA ) earnings will be scrutinized to justify the stock's

more than 160% year-to-date jump, which pushed its market cap

value to No. 2, just below Apple's ( AAPL ), as of Friday's

close.

"Nvidia's ( NVDA ) on tap. People are taking a little money off the

table, saying, well, we've earned some money," said Kim Forrest,

chief investment officer at Bokeh Capital Partners. "Their

forecast for the next six months or so is probably the most

important data that we get this week."

Other growth names such as Tesla shed 3%, while

Meta fell 1.4% and Apple ( AAPL ) lost 0.8%.

At 11:47 a.m. ET, the Dow Jones Industrial Average

was up 10.14 points, or 0.02%, at 41,185.22, the S&P 500

was down 22.99 points, or 0.41%, at 5,611.62, and the Nasdaq

Composite was down 168.87 points, or 0.94%, at

17,708.93.

The Energy sector bucked the trend to rise 0.6%,

as reports of oil supply disruptions amid the geopolitical

conflict in the Middle East lifted crude prices.

Other areas in the market, including financials stocks

such as American Express ( AXP ) and consumer staples such as

Proctor & Gamble, also saw gains, limiting declines on

the blue-chip Dow, which hit an intraday record high earlier in

the day.

The main indexes rallied more than 1% on Friday, with the

benchmark S&P 500 nearing record highs after U.S. Federal

Reserve Chair Jerome Powell said "the time has come" to lower

borrowing costs in the light of a diminishing upside risk to

inflation and moderating labor demand.

Traders are now betting on either a 25-basis-point or a

50-basis-point rate cut in September. Odds of the former stand

at 67.5%, while odds of a 50-bps cut are at 34.5%, according to

the CME Group's FedWatch tool.

Friday's highly anticipated Personal Consumption Expenditure

data for July, the central bank's preferred inflation gauge,

could provide more insight into the policy easing trajectory.

Results from Dell, Salesforce ( CRM ), Dollar

General ( DG ) and Gap are also expected through the

week.

Among others, U.S.-listed shares of PDD Holdings ( PDD )

sank 29.8% after the Temu-owner missed market expectations for

second-quarter revenue.

Boeing ( BA ) slipped 1.4% after NASA picked SpaceX over the

planemaker's Starliner to return its astronauts from space next

year.

Advancing issues outnumbered decliners by a 1.41-to-1 ratio

on the NYSE, and by a 1.19-to-1 ratio on the Nasdaq.

The S&P index recorded 91 new 52-week highs and no new lows,

while the Nasdaq recorded 127 new highs and 26 new lows.