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PCE rises 2.3% in October on annual basis

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Dell, HP fall after downbeat quarterly forecasts

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Q3 GDP unrevised at 2.8%; weekly jobless claims at 213,000

(updates with closing prices)

By Saeed Azhar, Johann M Cherian and Purvi Agarwal

Nov 27 (Reuters) -

Wall Street's main indexes closed lower on Wednesday, with

the Nasdaq leading declines, as technology stocks slumped on

Thanksgiving eve on worries the Federal Reserve may be cautious

about rate cuts after stubbornly strong U.S. inflation data.

Data showed

consumer spending increased solidly

in October, suggesting the U.S. economy maintained its

strong pace of growth, but progress on lowering inflation

appeared to have stalled.

Traders added to bets the Fed will lower borrowing costs by

25 basis points at its December meeting, according to CME's

FedWatch. However, they anticipate the central bank leaving

rates unchanged at its January and March meetings.

Investors were still gauging the impact of President-elect

Donald Trump's pledge on Monday to impose duties of 25% on

imports from Mexico and Canada and 10% on Chinese goods unless

they halt flows of the deadly opioid fentanyl and illegal

migrants into the U.S.

Goldman Sachs said in a note this week an escalation in

tariff policy risks delaying the return to 2.0% inflation

target.

According to preliminary data, the S&P 500 lost 22.85

points, or 0.38%, to end at 5,998.78 points, while the Nasdaq

Composite lost 113.80 points, or 0.59%, to 19,061.78.

The Dow Jones Industrial Average fell 136.31 points, or

0.31%, to 44,723.23.

Dell and HP slumped after downbeat

quarterly forecasts, weighing on the Information Technology

sector, which led sectoral declines.

The sentiment spread to megacaps such as Nvidia ( NVDA )

and Microsoft ( MSFT ), while the Philadelphia SE Semiconductor

Index ended lower.

The Russell 2000 index was sluggish after hitting

a record high earlier in the week.

Investors also assessed data earlier in the day which

showed the economy

grew

at a solid clip in the third quarter. Weekly jobless claims

fell

again last week, leaving the door open for another rate cut

from the Fed in December.

"Inflation has proven to be a little stickier than the

Fed would have liked, which may give them pause with respect to

cutting rates," said Scott Welch, chief investment officer at

Certuity.

"There are questions around the effects of Trump's

stated tariff policy, which, if implemented could be pretty

inflationary and so the Fed is going to have to balance itself

between the economic data and the incoming administration's

policy agenda."

Minutes from the Fed's November meeting, released on

Tuesday, showed policymakers were uncertain about the outlook

for interest-rate cuts and how much the current rates were

restricting the economy.

The benchmark S&P 500 is on track for its biggest one-month

rise in a year and its sixth month of gains out of seven, as

markets price in the probability of Trump's policies benefiting

local businesses and the overall economy.

Among others, Workday slipped after forecasting

fourth-quarter subscription revenue below expectations, hit by

weaker client spending on its human capital management software.