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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 0.32%, S&P flat, Nasdaq down 0.15%

(Updated at 10:05 a.m. ET/1405 GMT)

By Lisa Pauline Mattackal and Johann M Cherian

June 6 (Reuters) - Technology stocks retreated in choppy

trading on Thursday, pressuring the benchmark S&P 500 and the

Nasdaq indexes, while the Dow inched up after jobless claims

data raised hopes for the U.S. Federal Reserve's rate cuts.

The Nasdaq touched fresh intraday record highs shortly after

open, however, initial gains fizzled out due to a 1.5% loss in

Nvidia ( NVDA ), which had crossed $3 trillion in market

valuation in the previous session and overtaken Apple as the

world's second most valuable company.

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.

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

0.6% rise in communication services, while the

technology sector led declines with a 0.5% dip, after

sharp gains on Wednesday.

"There's just a lot of momentum and high sentiment in the

semiconductor space, and while over the intermediate term you'll

need to bring some of that into check, in the near term, those

types of things can really run," said Ross Mayfield, investment

strategy analyst at Baird.

Gains in software companies, including a 3.0% rise in

Salesforce, helped the blue-chip Dow outperform.

On the data front, jobless claims rose more than expected to

a seasonally adjusted 229,000 for the week ended June 1, the

Labor Department said, the latest in a string of reports

indicating tightness in the labor market is reducing, giving the

Fed more room to cut rates.

The attention has now turned to the crucial nonfarm payrolls

report due Friday.

Traders see a 70% 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," Mayfield said.

At 10:05 a.m. ET, the Dow Jones Industrial Average

was up 124.12 points, or 0.32%, at 38,931.45, the S&P 500

was up 0.01 points, or 0.00%, at 5,354.04, and the Nasdaq

Composite was down 25.30 points, or 0.15%, at 17,162.60.

Among others, Lululemon Athletica ( LULU ) leapt 4.4% after

beating expectations for first-quarter profit and revenue on

Wednesday, as its China-based business helped offset slowdowns

in North America.

U.S.-listed shares of NIO dropped 7.4%

after the Chinese electric vehicle maker posted a quarterly net

loss.

Five Below ( FIVE ) slumped 11.4% after the discount store

operator trimmed its annual net-sales forecast.

Advancing issues outnumbered decliners by a 1.02-to-1

ratio on the NYSE. Declining issues outnumbered advancers for a

1.33-to-1 ratio on the Nasdaq.

The S&P index recorded 18 new 52-week highs and 3 new lows,

while the Nasdaq recorded 41 new highs and 46 new lows.