(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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Weekly jobless claims rise more than expected

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Nvidia ( NVDA ) falls after crossing $3 trillion market cap on

Wednesday

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Nio falls after logging Q1 net loss

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Lululemon up on topping quarterly estimates on China

demand

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Indexes: Dow up 0.05%, S&P down 0.09%, Nasdaq down 0.12%

(Updated at 12:08 p.m. ET/1608 GMT)

By Lisa Pauline Mattackal and Johann M Cherian

June 6 (Reuters) - Wall Street struggled for direction

on Thursday as AI-favorite Nvidia ( NVDA ) slipped after a tech-led rally

in the previous session, and investors awaited a key labor

market report ahead of the Federal Reserve's meetings next week

to decide on interest rates.

The Nasdaq and S&P 500 touched fresh intraday record highs

shortly after the open, however, initial gains fizzled out as

Nvidia ( NVDA ) slipped more than 2%. In the previous session,

it had crossed $3 trillion in market valuation and overtaken

Apple as the world's second most valuable company.

"Today definitely feels like it's a bit of profit taking or

just a breather for a stock that's up 145% year to date," said

Dave Mazza, CEO of Roundhill Investments.

Gains in Nvidia ( NVDA ) and other AI-related players have largely

driven Wall Street's rally this year, with the chipmaker

accounting for roughly a third of the S&P 500's over 12%

year-to-date gains.

The technology sector led declines with a 0.5%

dip, while an index tracking chip stocks lost 0.8%.

Investors' focus is now on the crucial nonfarm payrolls

report, expected on Friday, which they expect to offer further

clues on the strength of the labor market and the path for

Federal Reserve policy.

A Thursday report from the Labor Department showed jobless

claims rose more than expected to a seasonally adjusted 229,000

for the week ended June 1, the latest in a string of reports

indicating tightness in the labor market is reducing, giving the

Fed more room to cut rates.

Traders see a 68% chance of a September rate reduction,

according to the CME's FedWatch tool, and have priced in about

two cuts this year, as per data from LSEG. Forecasters polled by

Reuters also expect two cuts.

Some market participants also pointed to growing pressure

for the Fed with both the European Central Bank and Bank of

Canada beginning easing cycles.

"If you get too much divergences among the major economies,

it can start to put pressure on different pockets of the

economy...it might make something like a (Fed) September cut a

little more obvious," said Ross Mayfield, investment strategy

analyst at Baird.

Five out of the 11 S&P 500 sectors were in gains, led by a

0.6% rise in consumer staples.

Gains in software companies, including a 2.5% rise in

Salesforce, helped the Dow outperform.

At 12:08 p.m. ET, the Dow Jones Industrial Average

was up 20.85 points, or 0.05%, at 38,828.18, the S&P 500

was down 4.87 points, or 0.09%, at 5,349.16, and the Nasdaq

Composite was down 20.95 points, or 0.12%, at 17,166.95.

Among others, Lululemon Athletica ( LULU ) rose 5% after

beating expectations for first-quarter profit and revenue on

Wednesday.

U.S.-listed shares of NIO dropped 6.5%

after the Chinese electric vehicle maker posted a quarterly net

loss.

Five Below ( FIVE ) slumped 12.9% after the discount store

operator trimmed its annual net-sales forecast.

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

on the NYSE. Declining issues outnumbered advancers for a

1.50-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and 5 new lows,

while the Nasdaq recorded 51 new highs and 68 new lows.