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

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

*

US annual PCE inflation rises 2.7% YoY in April

*

Dell plunges after lower current-quarter profit forecasts

*

Trump Media ( DJT ) falls in choppy trading after Trump's

conviction

*

Indexes: Dow up 0.15%, S&P down 0.51%, Nasdaq loses 1.23%

(Updated at 11:29 a.m. ET/1529 GMT)

By Johann M Cherian and Lisa Pauline Mattackal

May 31 (Reuters) -

The S&P 500 and the Nasdaq gave up early gains on Friday and

were set to snap their five-week winning streaks, as investors

evaluated the timing of rate cuts from the Federal Reserve

following an inflation report largely in line with estimates.

After opening marginally higher, the indexes dropped to

a two-week low, weighed by megacap growth names such as Alphabet

, Amazon.com ( AMZN ) and Nvidia ( NVDA ), which lost

between

1.1

% and

2.6

%.

Technology led declines among the S&P 500

sectors, falling 1.5% and on track for its worst week in over a

month, while the Philadelphia SE Semiconductor Index lost

2.6%.

U.S. inflation tracked sideways in April, a worrying sign

for the central bank that suggests the elevated pace of price

increases could last longer than expected, according to the

Fed's preferred Personal Consumption Expenditure report.

"Progress on disinflation has clearly stalled this

year," said Cameron Dawson, chief investment officer at Newedge

Wealth.

"The inflation data is not hot enough to suggest that

(the Fed) needs to hike rates again, but it's not cool enough to

suggest that they can cut rates right away."

Still, expectations for a

September rate cut

climbed to over 55%, compared with 48.7% seen before the

data, according to the CME FedWatch tool.

Tech and chip stocks, which have led Wall Street's

recent rally, retreated this week as a spike in Treasury yields

pressured riskier assets.

The blue-chip Dow fared better than its peers, helped by

healthcare stocks. The S&P 500 healthcare sector was

among the gainers, up

0.7

%, along with real estate's 1.2% rise.

"Investors are starting to look for parts of the market

where there's better value and they are rotating into those that

have been laggards," said Garrett Melson, portfolio strategist

at Natixis Investment Managers.

Further weighing on sentiment, the Chicago Purchasing

Managers' Index fell to 35.4, significantly below the estimated

reading of 41.

Comments from Atlanta President Raphael Bostic, a

Federal Open Market Committee voting member, are expected later

in the day.

At

11:29

a.m. ET, the Dow Jones Industrial Average

was up 57.67 points, or 0.15%, at

38,169.15

, the S&P 500

was down 26.62 points, or 0.51%, at

5,208.86

, and the Nasdaq Composite

was down 206.02 points, or 1.23%, at

16,531.06

.

Among big movers, Dell plummeted 22% after it

forecast current-quarter profit below market estimates and

signaled that higher costs to build servers that meet heavy AI

workloads would dent its annual margins.

Zscaler ( ZS ) jumped 6.5% after the security solutions

provider forecast fourth-quarter results above estimates.

Gap surged 24.2% after the apparel maker raised its

annual sales forecast and its first-quarter results beat market

expectations, in fresh signs that its turnaround strategy was

starting to work.

Trump Media & Technology Group ( DJT ) fell 5.4% after a New

York jury convicted former President Donald Trump of falsifying

documents to cover up a hush money payment to a porn star ahead

of the 2016 elections.

Advancing issues outnumbered decliners by a 1.84-to-1 ratio

on the NYSE and by a 1.17-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and six

new lows, while the Nasdaq recorded

40

new highs and

59

new lows.