NEW YORK: US stock indexes slipped on Thursday as investors worried that a resilient economy would give the Federal Reserve more room to raise interest rates, although a surge in Nvidia shares helped lift some of that gloom.

Stock markets have hit a volatile patch this month, with the S&P 500 shedding more than 4% in the past six sessions, as data pointing to a strong economy and hawkish commentary by Fed officials dent appetite for risky assets.

The Labor Department said the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, reflecting tight labor market conditions.

A separate report confirmed the economy grew solidly in the fourth quarter, though much of the increase in output came from rising inventory levels at businesses.

US gross domestic product increased 2.7% in the fourth quarter, according to the government’s second estimate. Economists were forecasting a 2.9% rise.

“Any incremental piece of economic data builds the narrative of the bears in the market that the rally so far is a false euphoria, and this is weighing on the market more than the good news from some of these earnings,” said Peter Andersen, founder of Andersen Capital Management.

Analysts polled by Reuters predict a correction within the next three months even though they expect the S&P 500 to climb 5% by year-end.

The tech-heavy Nasdaq slipped after rising more than 1% earlier in session, as megacap stocks including Apple and Amazon.com Inc fell.

Nvidia Corp surged 13.3% to a more than 10-month high after the company forecast quarterly sales above estimates and reported a surge in the use of its chips to power artificial intelligence services.

Other chipmakers such as Broadcom Inc, Qualcomm Inc and Intel Corp rose between 0.2% and 2.6%. The Philadelphia SE Semiconductor index climbed 1.8%.

At 12:34 p.m. ET, the Dow Jones Industrial Average was down 195.20 points, or 0.59%, at 32,849.89, the S&P 500 was down 13.44 points, or 0.34%, at 3,977.61, and the Nasdaq Composite was down 41.84 points, or 0.36%, at 11,465.23.

Nine of the 11 major S&P 500 sectors declined, with communication services dropping 1.5%, hurt by a 5.7% fall in Netflix Inc on reports that the streaming service was cutting subscription prices in 30 countries.

Among other stocks, eBay Inc slid 7.2% after warning of dour demand in the first half of 2023 due to strained consumer spending in the United States and Europe.

Moderna Inc fell 8.4% after the vaccine maker reaffirmed its annual sales forecast of $5 billion for its COVID-19 vaccines despite its fourth-quarter sales exceeding estimates.

Declining issues outnumbered advancers for a 1.28-to-1 ratio on the NYSE and a 1.45-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and three new lows, while the Nasdaq recorded 40 new highs and 102 new lows.