(Updates to midafternoon trading, adds analyst comment)

* Indexes up: Dow 1.60%, S&P 500 0.53%, Nasdaq 0.23%

* U.S. chipmakers dip after Broadcom's ( AVGO ) quarterly results

* CrowdStrike ( CRWD ) slumps on rise in quarterly operating

expenses

* Weekly jobless claims increase more than expected;

AI-related layoffs on the rise

By Stephen Culp and Medha Singh

NEW YORK, June 4 (Reuters) - Wall Street advanced on

Thursday as progress toward ending the Iran war buoyed investor

sentiment, while disappointing results from Broadcom ( AVGO ) led a chip

selloff that held the Nasdaq's gains in check.

The blue-chip Dow touched a record high, with a boost from

healthcare and financial stocks, but the gains

of the S&P 500 and the Nasdaq were more muted.

Chipmaker Broadcom missed revenue expectations, sending

its shares tumbling 11.2% and casting a pall over the AI frenzy,

which has sent chip stocks up nearly 95% so far this

year.

"Broadcom ( AVGO ) is down, but Nvidia and Taiwan Semiconductor are

up," said Oliver Pursche, senior vice president at Wealthspire

Advisors in New York. "This is a great example of rational

exuberance in the sector, where the right companies are being

rewarded, and if you stumble or have a bad quarter or a mediocre

outlook for the remainder of the year, you get punished."

The U.S. House of Representatives passed a measure on Wednesday

that would block President Donald Trump from continuing the war

on Iran.

Additionally, a U.S.-mediated ceasefire agreement between Israel

and Lebanon, an essential condition of an Iranian agreement to a

peace deal, bolstered optimism of a near-term resolution to the

war. But the truce was rejected by the pro-Iran Hezbollah, which

said it would not withdraw troops from Lebanon.

A drop in front-month crude futures reflected hopes that

tanker traffic through the crucial Strait of Hormuz could

shortly resume.

"Congress has effectively limited the president's war powers

abilities," Pursche added. "The U.S. is very incentivized to

come up with a deal and to end this, because Iran holds the

cards and they have effectively said they're going to keep a

stranglehold on the Strait of Hormuz" until a deal is reached.

On the economic front, initial jobless claims unexpectedly

rose 6.1%, and first-quarter labor costs and productivity were

revised sharply lower. A report from Challenger, Gray and

Christmas showed layoffs announced by U.S. corporations jumped

11% in May to 97,006, of which 39.8% was attributed to AI.

The Dow Jones Industrial Average rose 809.88 points,

or 1.60%, to 51,496.83, the S&P 500 gained 39.74 points,

or 0.53%, to 7,593.42 and the Nasdaq Composite gained

60.69 points, or 0.23%, to 26,915.12.

Among the 11 major sectors of the S&P 500, healthcare and

financial stocks boasted the biggest percentage gains, while

technology shares were down the most.

Chipmaker Marvell Technology gained 5.6%, while

Advanced Micro Devices ( AMD ), Micron Technology ( MU ) and

Qualcomm ( QCOM ) fell between 1.9% and 4.1%.

The healthcare sector got a boost from UnitedHealth ( UNH ),

which jumped 5.0% after Bank of America raised its rating on the

healthcare conglomerate's shares to "buy."

The financial index's rebound followed a sharp selloff in

the previous session due to revived concerns over private

credit.

Blackstone became the latest asset manager to cap

withdrawals from its flagship private credit fund following a

rise in redemption requests. Its shares jumped 7.1%.

Cybersecurity firm CrowdStrike ( CRWD ) slumped 4.5% after

reporting an increase in quarterly operating expenses.

An investor roadshow for Elon Musk-led SpaceX began on

Thursday ahead of its market debut on June 12. It aims to raise

$75 billion in a record IPO that would value it at $1.75

trillion.

Advancing issues outnumbered decliners by a 1.97-to-1 ratio

on the New York Stock Exchange. There were 206 new highs and 121

new lows on the NYSE.

On the Nasdaq, 3,049 stocks rose and 1,654 fell as advancing

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

The S&P 500 posted 21 new 52-week highs and 7 new lows while

the Nasdaq Composite recorded 77 new highs and 85 new lows.