*

Indexes: Dow up 0.18, S&P 500 off 0.04%, Nasdaq slips

0.27%

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Fed's Williams open to rate cuts depending on data, report

says

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J.M. Smucker falls after quarterly profit miss

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MongoDB ( MDB ) soars after raising annual profit forecast

(Updates after market opens)

By Johann M Cherian and Sanchayaita Roy

Aug 27 (Reuters) -

The main U.S. stock indexes were mixed on Wednesday as

investors took a breather ahead of Nvidia's ( NVDA )

earnings

, which are expected to test the momentum of Wall Street's

AI-driven rally.

The chip major was at the forefront of the market recovery

after April's lows, crossing the $4-trillion market

capitalization mark in July to become the world's largest

company as investors continued to bet on the global demand for

artificial-intelligence infrastructure.

Traders worry the technology sector - which makes

up nearly 50% of the S&P 500 - might be overvalued.

Valuations of the benchmark index are well above long-term

averages, according to data compiled by LSEG.

The concerns weighed on tech stocks last week, after OpenAI

CEO Sam Altman spoke of a potential bubble and a study from the

Massachusetts Institute of Technology showed AI tools boosted

individual productivity, not corporate earnings.

Nvidia ( NVDA ) slipped 1% ahead of its earnings, expected

after markets close, while the broader S&P 500 tech sector lost

0.4%. Options traders are pricing in about a $260-billion swing

in the chipmaker's market value after the results.

The impact of the Sino-U.S. trade war on the company's

significant China business earlier this year will be closely

watched, along with the effect on forecasts from its recent

revenue-sharing deal with the U.S. government.

"It seems to be quite challenging to understand what is the

ultimate impact of Nvidia ( NVDA ) in China, because we don't exactly

know if the Chinese are happy with the chips they're getting and

if they are going to continue to buy more," said Phil Blancato,

chief executive officer of Ladenburg Thalmann Asset Management.

Still, Blancato said he expects the report to reflect strong

demand for the company's chips from the rest of the world.

At 09:50 a.m. ET, the Dow Jones Industrial Average

rose 82.98 points, or 0.18%, to 45,501.05, the S&P 500

shed 2.45 points, or 0.04%, to 6,462.39, and the Nasdaq

Composite lost 58.90 points, or 0.27%, to 21,485.37.

Six of the 11 S&P 500 sectors edged higher, with energy

leading gains with a 1.1% rise.

Microsoft ( MSFT ) and Meta, the chip leader's top

customers, as well as semiconductor stocks Broadcom ( AVGO ) and

Advanced Micro Devices ( AMD ), fell marginally.

Markets were also stabilizing following an initial decline

on Tuesday, after U.S. President Donald Trump attempted to fire

Federal Reserve Governor Lisa Cook.

The move is likely to face legal challenges. If successful,

it could allow Trump to nominate a dovish-leaning official to

the central bank's board, posing a challenge to the independence

of the U.S. Federal Reserve.

Investors are pricing in a 25-basis-point interest-rate cut

in September, according to data compiled by LSEG, with most big

brokerages also leaning in that direction.

New York Fed President John Williams said there was a need

to stay data dependent before deciding on a move in September,

according to a report.

In stocks, MongoDB ( MDB ) jumped 32.2% after the

software-maker raised its annual profit forecast.

J.M. Smucker fell 6% after the Jif peanut butter

maker missed first-quarter profit estimates.

Advancing issues outnumbered decliners by a 1.4-to-1 ratio

on the NYSE and by a 1.4-to-1 ratio on the Nasdaq.

The S&P 500 posted 19 new 52-week highs and one new low,

while the Nasdaq Composite recorded 63 new highs and 17 new

lows.