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Cisco Systems ( CSCO ) gains after annual revenue forecast hike

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Disney ( DIS ) warns of long distribution dispute with YouTube TV

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Traders see December rate cut chance as coin flip

(Updates with end of trading session)

By Noel Randewich

Nov 13 (Reuters) - Wall Street ended sharply lower on

Thursday, with steep losses in Nvidia ( NVDA ) and other AI heavyweights,

as investors scaled back expectations of interest rate cuts due

to inflation worries and divisions among central bankers about

the U.S. economy's health.

The U.S. government reopened after a record 43-day shutdown

that had worried investors and disrupted the flow of economic

data.

A growing number of Federal Reserve policymakers in recent

days have signaled hesitation about further interest rate cuts,

pushing financial market-based odds of a reduction in borrowing

costs in December to near even. Fed officials who spoke recently

cited worries about inflation and signs of relative stability in

the labor market after two U.S. interest rate cuts this year.

"The fundamental question is, is tariff inflation transitory

and a one-time deal? And whether it is or isn't, that's why some

of the Fed governors don't want to cut," said Jake Dollarhide,

chief executive officer of Longbow Asset Management in Tulsa,

Oklahoma. "It's a risky bet either way, whether they cut or

don't cut."

Shares fell for some of the U.S. stock market's strongest

performers in recent years, as investors fretted about high

valuations fueled by optimism about artificial intelligence.

Nvidia ( NVDA ), Tesla and Broadcom ( AVGO ) all

lost ground.

"There's a lot of uncertainties about the state of the

economy. ... What we're going through is a little bit of a

correction in the market in the AI sector and we're seeing

market rotation," said Peter Cardillo, chief market economist at

Spartan Capital Securities in New York.

According to preliminary data, the S&P 500

lost 113.05 points, or 1.65%, to end at 6,737.87 points,

while the Nasdaq Composite lost 532.74 points, or 2.28%,

to 22,873.72. The Dow Jones Industrial Average

fell 797.29 points, or 1.64%, to 47,457.53.

Walt Disney ( DIS ) tumbled after the media giant signaled

it was preparing for a potentially prolonged fight with YouTube

TV over distribution of its cable channels.

Cisco Systems ( CSCO ) rallied after raising full-year profit

and revenue forecasts, betting on demand for its networking

equipment.

On Tuesday and Wednesday, the Dow notched record high

closes, benefiting from investors selling technology stocks and

moving money into the health care sector.

Recently, data from payroll processor ADP showed private

employers shed over 11,000 jobs a week through late October.

Indeed Hiring Lab slides showed a 16% drop in retail-related

job postings in October from a year ago, pointing to continued

weakness in the labor market.

Traders are pricing in about a 47% chance of a

25-basis-point rate cut in December, lower than last week's 70%

probability, according to CME Group's FedWatch tool.

APA Corp ( APA ) gained after a report that Spain's Repsol

is considering a reverse merger of its upstream unit

with potential partners, including the energy producer.

Memory device makers Western Digital ( WDC ), Seagate ( STX )

and SanDisk ( SNDK ) dropped after Japanese memory

manufacturer Kioxia Holdings ( KXHCF ) reported lower sales and profits.