*

Indexes: Dow slips 0.04%, S&P 500 up 0.01%, Nasdaq up

0.09%

*

EchoStar ( SATS ) jumps after AT&T ( T ) to buy spectrum licenses for $23

bln

*

AMD gains on Truist Securities' bullish upgrade

*

Eli Lilly ( LLY ) up as pill cuts weight by 10.5% in diabetes

patients

(Updates with late morning prices)

By Johann M Cherian and Sanchayaita Roy

Aug 26 (Reuters) - Wall Street's main indexes were flat

on Tuesday, constrained by a rise in Treasury bond yields as

President Donald Trump's decision to fire a central bank

governor deepened concerns about the Federal Reserve's

independence.

Investors also awaited Nvidia's ( NVDA ) results and a key

inflation report later this week for more insight on artificial

intelligence and interest rate cuts - the two big themes behind

recent market gains.

Earlier in the session, futures dropped after Trump said he

was removing Fed Governor Lisa Cook over alleged improprieties

in obtaining mortgage loans, prompting investor unease about

what it could also mean for the outlook on monetary policy just

weeks ahead of the central bank's meeting.

The uncertainty was evident as longer-dated Treasury bonds

and the dollar remained under

pressure.

Trump's action is likely to face legal challenges but, if

successful, it would let him nominate a new member to the Fed's

board at a time when he has called for lower interest rates.

"We've actually been pretty impressed by how the market has

absorbed this one. I still have confidence that the Fed's going

to operate independently regardless of the Trump

administration," said Mark Hackett, chief market strategist at

Nationwide.

Despite lingering inflation pressures, traders have been

pricing in a 25-basis-point interest rate cut for September,

encouraged by dovish signals from Fed Chair Jerome Powell, data

pointing to labor market weakness and a shake up at the central

bank.

"This is not generally the environment where you get

aggressive Fed rate cuts ... but obviously the market expects it

so the Fed may have been backed into a little bit of a corner

here," Hackett said.

Morgan Stanley became the latest brokerage to forecast an

interest-rate cut in September, but key upcoming inflation and

jobs reports could prompt investors to reassess expectations.

At 11:51 a.m. ET, the Dow Jones Industrial Average

fell 18.37 points, or 0.04%, to 45,264.10, the S&P 500

gained 0.33 points, or 0.01%, to 6,439.65 and the Nasdaq

Composite gained 19.40 points, or 0.09%, to 21,468.69.

Seven of the 11 S&P 500 sectors edged lower, with energy

leading losses, tracking lower oil prices.

Nvidia's ( NVDA ) results on Wednesday will be a major catalyst for

U.S. stocks that have rallied over the past few years on the

potential earnings growth from AI.

The AI enthusiasm has also pushed up valuations of Wall

Street's benchmark S&P 500 to above long-term averages,

heightening the risk of a selloff in case the chip giant falls

short of market expectations.

Advanced Micro Devices ( AMD ) gained 1.4% after Truist

Securities upgraded the chip stock to "buy" from "hold".

Eli Lilly ( LLY ) rose 4.2% after the drugmaker said its

experimental pill cuts body weight by 10.5% in diabetes

patients.

EchoStar ( SATS ) jumped 77%, hitting a record high, after

telecom giant AT&T ( T ) said it has agreed to buy certain

wireless spectrum licenses from the satellite communications

firm for about $23 billion.

Declining issues outnumbered advancers by a 1.06-to-1 ratio

on the NYSE. Advancing issues outnumbered decliners by a

1.22-to-1 ratio on the Nasdaq.

The S&P 500 posted 14 new 52-week highs and two new lows

while the Nasdaq Composite recorded 76 new highs and 38 new

lows.

(Reporting by Johann M Cherian and Sanchayaita Roy in

Bengaluru; Editing by Devika Syamnath)