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S&P 500, Nasdaq end lower; Dow ends higher

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US oil prices settle higher

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IBM ( IBM ) shares jump following results

(Updates to 4:30 p.m. ET)

By Caroline Valetkevitch

NEW YORK, July 25 (Reuters) - World stock indexes mostly

fell in choppy trading Thursday, adding to losses after a

tech-led selloff in the previous session, while the Japanese yen

drifted near flat after reaching a 2 1/2-month high against the

U.S. dollar.

U.S. megacap stocks were mostly in positive territory

throughout afternoon trading before losing some ground by

session's end. Tesla shares were last up 2%, while

shares of Nvidia ( NVDA ) were down 1.7%.

The small-cap Russell 2000 index rose 1.3%.

"You could surmise there were some dip buyers coming in ...

just because of how quickly things moved yesterday," said Chad

Oviatt, director of investment management at Huntington Private

Bank.

"Small caps are winning this week relative to large caps,"

he said. "When you get a GDP report that's better than expected,

that helps to support the narrative of a potential soft

landing."

Data showed the U.S. economy grew faster than expected in

the second quarter amid solid gains in consumer spending and

business investment, but inflation pressures subsided, leaving

intact expectations of a September interest rate cut from the

Federal Reserve.

The Fed is scheduled to hold its next policy meeting at the

end of July. Markets see only a slight chance for a rate cut of

at least 25 basis points (bps) at that meeting, but are fully

pricing in a September cut, according to CME's FedWatch Tool.

Much focus remains on earnings, especially reports this week

from top U.S. tech-related names. Shares of International

Business Machines ( IBM ) jumped 4.3% on Thursday after it

reported upbeat revenue results late Wednesday.

The Dow Jones Industrial Average rose 81.20 points,

or 0.20%, to 39,935.07, the S&P 500 lost 27.91 points, or

0.51%, to 5,399.22 and the Nasdaq Composite lost 160.69

points, or 0.93%, to 17,181.72.

The S&P 500 and Nasdaq on Wednesday suffered their biggest

daily percentage declines since late 2022 in the wake of

lackluster quarterly reports from Alphabet and Tesla.

Investors have been assessing what happens next in markets

following the retreat in the glitzy megacaps.

MSCI's gauge of stocks across the globe fell

5.80 points, or 0.72%, to 796.78. The STOXX 600 index

fell 0.72%.

Investors are looking ahead to next week's Bank of Japan

meeting which could see a potential rate hike.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

gained 0.01% at 104.39. Against the Japanese yen, the

dollar was near flat at 153.91.

The Japanese yen this week rallied sharply as market

participants unwound their long-held bets against the currency.

Also, the selloff in global stocks had driven investors toward

the yen.

Longer-dated U.S. Treasury yields eased as the recent fall

in equities helped fuel a safe-haven bid for bonds, while the

solid reading on U.S. economic growth failed to shift

expectations for a Fed rate.

The yield on the benchmark U.S. 10-year Treasury note

fell 2.8 basis points to 4.258%.

A closely watched part of the U.S. Treasury yield curve

measuring the gap between yields on two- and 10-year Treasury

notes, seen as an indicator of economic

expectations, was at a negative 18.5 basis points after

steepening to a negative 11.3, its least inverted since Oct. 23.

Oil prices edged higher after the strong U.S. economic data

boosted demand expectations.

U.S. crude rose 69 cents to settle at $78.28 a barrel

and Brent rose 66 cents to settle at $82.37. Spot gold

dropped by 1.61% to $2,358.99 an ounce.

Earlier, China's central bank sprang a surprise cut in

longer-term interest rates, stoking further worries about the

world's second-largest economy.

(Additional reporting by Marc Jones in London; Editing by Angus

MacSwan, Mark Potter, William Maclean, Diane Craft and Daniel

Wallis)