* Indexes: Dow up 0.42%, S&P 500 flat, Nasdaq down 0.15%

* GlobalFoundries ( GFS ) falls on report of Mubadala share sale

* Zscaler ( ZS ) plunges after downbeat Q4 forecast

* Goldman Sachs ( GS ) lifts S&P 500 year-end forecast to 8,000

(Updates with analyst comment, prices)

By Twesha Dikshit and Utkarsh Hathi

May 27 (Reuters) - The S&P 500 and the Nasdaq were muted

on Wednesday in choppy trading, as investors remained cautious

while awaiting progress in Middle East talks.

White House denied reports from Iran's state TV that said

Tehran would restore Strait of Hormuz shipping within a month in

exchange for a U.S. military pullback and lifting of a naval

blockade.

Still, indexes traded near record highs. The Dow Jones

nudged higher, lifted by a rotation into healthcare and consumer

stocks. However, a pullback in chip stocks weighed on the

tech-heavy Nasdaq.

"After such a large run-up in the markets, it's not

surprising to me that there is a little bit of a pause," said

Sean Clark, chief investment officer of Clark Capital Management

Group.

"There's a lot of positives to look at right now. Even

though the outperformers are really being driven by tech, AI and

AI adjacent themes, I wouldn't discount the fact that the broad

market is participating as well."

At 11:35 a.m. ET, the Dow Jones Industrial Average

rose 212.62 points, or 0.42%, to 50,674.30, the S&P 500

lost 3.67 points, or 0.05%, to 7,515.45 and the Nasdaq Composite

lost 39.32 points, or 0.15%, to 26,616.86.

Seven of the 11 main S&P 500 sectors were in the positive

territory, with consumer discretionary leading the

gains, up almost 2%.

The healthcare index rose 0.7%, while consumer

staples added 1.5%.

Meanwhile, the S&P 500 energy index fell 1.2%,

tracking a decline of as much as 5% in oil prices. Tech shares

shed 1% after reaching an all-time high on Tuesday.

Chip stocks were down after a strong rally. Intel ( INTC )

and Marvell Technology ( MRVL ) fell over 4% each, while

Qualcomm shed 9.2%.

The Philadelphia SE Semiconductor index lost 2.7%,

with chip giant Nvidia ( NVDA ) off 2.3%.

Zscaler ( ZS ) tumbled 31% after the cloud security firm

projected fourth-quarter revenue below expectations.

JPMorgan shares dropped 3.3% after CEO Jamie Dimon

said expenses for the year could be $1 billion higher than

earlier estimates. The declines pressured the financials index.

Among other movers, GlobalFoundries ( GFS ) fell 11.6% after

Bloomberg News reported that majority owner Mubadala Investment

Company was seeking to raise $1.91 billion from an unregistered

block sale of GFS shares.

Bath & Body Works ( BBWI ) jumped 12.3% after reporting

first-quarter sales and profit above expectations, while

Abercrombie and Fitch ( ANF ) advanced 11.3% on posting a strong

quarterly profit.

EARNINGS DRIVE MARKETS, DATA AWAITED

A strong earnings season and expectations of about 29%

year-on-year growth in the first quarter have aided the rally on

Wall Street.

Goldman Sachs ( GS ) raised its 2026 year-end forecast for the S&P

500 to 8,000 from 7,600, citing continued strength in corporate

earnings.

Markets will next look toward the personal consumption

expenditures index data on Thursday. The Federal Reserve's key

inflation measure could provide fresh clues on the monetary

policy path forward under new chair Kevin Warsh.

Advancing issues outnumbered decliners by a 1.4-to-1 ratio

on the NYSE and by a 1.24-to-1 ratio on the Nasdaq.

The S&P 500 posted 36 new 52-week highs and 6 new lows,

while the Nasdaq Composite recorded 139 new highs and 52 new

lows.

(Reporting by Twesha Dikshit and Utkarsh Hathi; Editing by

Shinjini Ganguli and Joyjeet Das)