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

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

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US weekly jobless claims data higher than expected

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Arm Holdings down after tepid Q2 revenue forecast

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Eli Lilly ( LLY ) up as weight-loss drug cut heart failure risk in

trial

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Moderna ( MRNA ) slumps after slashing 2024 sales forecast

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Indexes up: Dow 0.60%, S&P 0.52%, Nasdaq 0.31%

(Updated at 09:37 a.m. ET/ 1337 GMT)

By Ankika Biswas and Shubham Batra

Aug 1 (Reuters) -

Wall Street's main indexes rose on Thursday, lifted by the

Federal Reserve's signals of a September rate cut and a rosy

sales forecast from Meta, although a pullback in chip stocks

could keep gains in check.

Meta Platforms ( META ) surged 7.9% after its second-quarter

revenue beat and upbeat third-quarter sales forecast pointed to

the possibility that its artificial intelligence costs would be

covered, boosting the Communication Services sector by

2.0%.

"It's very possible that Meta's spending a little too much

on AI, but they think AI is such an important trend, and for the

next 15 years it's going to be the place to be," said Chris

Zaccarelli, chief investment officer for Independent Advisor

Alliance.

The Facebook-owner's quarterly results were the first among

"Magnificent Seven" companies to enthuse investors, allaying

concerns around AI spending after dismal earnings from Alphabet

and Microsoft ( MSFT ) last month.

Markets have been on tenterhooks, looking for signs that the

tech behemoths can hold on to their bumper gains after steering

Wall Street to record highs this year on AI euphoria and hopes

of early rate cuts.

Most megacap stocks rose, with Apple ( AAPL ) and

Amazon.com ( AMZN ) gaining 0.4% and 0.9%, respectively, ahead

of their results after markets close. Tesla was down

2.3%.

AI trade favorite Nvidia ( NVDA ) rose 0.8%, a day after

adding about $330 billion to its market value - a record one-day

gain for any Wall Street company.

At 9:37 a.m. ET, the Dow Jones Industrial Average was

up 245.31 points, or 0.60%, at 41,088.10, the S&P 500 was

up 28.47 points, or 0.52%, at 5,550.77, and the Nasdaq Composite

was up 53.82 points, or 0.31%, at 17,653.22.

The S&P 500 and the Nasdaq had their best day since Feb. 22

on Wednesday, after Fed Chair Jerome Powell offered the stock

market a likely pivot to policy easing in September.

However, with prospects of rate cuts growing, investors are

now trying to gauge if the central bank will be able to ease

policy at a pace consistent with achieving the much awaited

"soft landing" for the economy.

Data showed weekly jobless claims rose to 249,000, higher

than the 236,000 that was expected - another sign of labor

market weakness ahead of Friday's Non-farm Payrolls reading.

The Russell 2000 small-cap index inched up 0.5%

after logging its biggest monthly gain in July since the start

of 2024, on hopes that mid- and small-cap companies will benefit

from a low-interest-rate environment.

Moderna ( MRNA ) slumped 19.2% after cutting its 2024

sales forecast for COVID-19 and respiratory syncytial virus

vaccines by up to 25%.

Eli Lilly ( LLY ) rose 2.5% after trial results showed

weight-loss drug Zepbound reduces the risk of hospitalization,

death and other outcomes for obese adults with a common type of

heart failure.

Arm Holdings slumped 8.3% after a conservative

revenue forecast, while Qualcomm ( QCOM ) lost 5.1% on flagging

a revenue hit after the U.S. revoked one of its export licenses

for sanctioned Chinese telecom firm Huawei.

Advancing issues outnumbered decliners by a 2.04-to-1 ratio

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

The S&P index recorded 27 new 52-week highs and no new lows,

while the Nasdaq recorded 41 new highs and 30 new lows.