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Indexes up: Dow 0.24%, S&P 500 0.22%, Nasdaq 0.21%

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Fed's Williams open to rate cuts depending on data, report

says

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J.M. Smucker falls after quarterly profit miss

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MongoDB ( MDB ) soars after raising annual profit forecast

(Updates with late morning prices)

By Johann M Cherian and Sanchayaita Roy

Aug 27 (Reuters) -

The main U.S. stock indexes inched higher on Wednesday, as

investors braced for

earnings

from AI-chip leader Nvidia ( NVDA ) that are expected to test the

momentum of Wall Street's technology-fueled rally.

Nvidia ( NVDA ) was at the forefront of the market recovery after

April's lows, crossing the $4-trillion market capitalization

mark in July on global enthusiasm around artificial-intelligence

to become the world's largest corporation.

Traders worry that companies in the S&P 500 technology index

- which accounts for about 34% of the S&P 500 - might be

overvalued. Valuations of the benchmark index are well above

long-term averages, according to data compiled by LSEG.

The concerns weighed on tech stocks last week, after OpenAI

CEO Sam Altman spoke of a potential bubble and a study from the

Massachusetts Institute of Technology showed AI tools boosted

individual productivity, not corporate earnings.

Nvidia ( NVDA ) climbed 0.2% ahead of results, which are

expected after markets close, while the broader tech sector

inched up 0.3%. Options traders are pricing in about a

$260-billion swing in the company's market value after the

results.

"Nvidia's ( NVDA ) strong results will be like Xanax to the market

that was concerned over (OpenAI's Sam) Altman's comments," said

Eric Schiffer, chief executive officer of the Patriarch

Organization, who expects an upbeat report.

The impact of the Sino-U.S. trade war on the company's

significant China business earlier this year will be closely

watched, along with the effect on forecasts from its recent

revenue-sharing deal with the U.S. government.

"The China story remains uncertain: Beijing is now

pressuring domestic firms to buy local chips, which could erode

Nvidia's ( NVDA ) Chinese revenue share," said Ipek Ozkardeskaya, a

senior analyst at Swissquote Bank.

At 11:50 a.m. ET, the Dow Jones Industrial Average

rose 107.21 points, or 0.24%, to 45,525.28, the S&P 500

gained 14.32 points, or 0.22%, to 6,480.26, and the Nasdaq

Composite was up 45.44 points, or 0.21%, to 21,589.71.

Microsoft ( MSFT ) and Meta, Nvidia's ( NVDA ) top

customers, as well as semiconductor stocks Broadcom ( AVGO ) and

Advanced Micro Devices ( AMD ), struggled for direction.

Energy led gains among the 11 S&P 500 sectors

with a 0.7% rise. The Russell 2000 small-caps index

climbed 0.5% and has gained more than 4% since Federal Reserve

Chair Jerome Powell's dovish comments last week.

Markets were also stabilizing following Tuesday's initial

decline, after U.S. President Donald Trump attempted to fire Fed

Governor Lisa Cook.

The move is likely to face legal challenges. If successful,

it could allow Trump to nominate a dovish-leaning official to

the central bank's board, posing a challenge to the independence

of the Fed.

Investors are pricing in a 25-basis-point interest-rate cut

in September, according to data compiled by LSEG, with most big

brokerages also leaning in that direction.

New York Fed President John Williams said there was a need

to stay data-dependent before deciding on a move in September,

according to a report.

In stocks, MongoDB ( MDB ) jumped 34.3% after the

software-maker raised its annual profit forecast.

J.M. Smucker fell 5.1% after the Jif peanut butter

maker missed first-quarter profit estimates.

Advancing issues outnumbered decliners by a 1.33-to-1 ratio

on the NYSE and by a 1.29-to-1 ratio on the Nasdaq.

The S&P 500 posted 25 new 52-week highs and one new low,

while the Nasdaq Composite recorded 106 new highs and 22 new

lows.