Updates after markets open

By Shashwat Chauhan and Ragini Mathur

Feb 26 (Reuters) - The S&P 500 and the Nasdaq dipped on Thursday as the recent rally in technology stocks ground to a halt with Nvidia declining despite its stellar quarterly results, reigniting concerns regarding the AI trade.

Nvidia NVDA.O dropped 3.6% despite posting better-than-expected results for the January quarter and forecasting current-quarter revenue above market estimates.

"Investors have been wary of the AI trade and its implications as we look out over the next couple of years and even though Nvidia did deliver strong numbers, it wasn't enough to convince investors to push the stock higher," said Jeff Schulze, head of economic and market strategy at ClearBridge Investments.

The Philadelphia SE Semiconductor Index .SOX lost 3% after hitting a record high in the last session, while most megacap and growth stocks were lower with Alphabet GOOGL.O among the biggest decliners, down 2.2%.

Meanwhile, the S&P 500 software and services index .SPLRCIS gained 2%, rebounding as Salesforce CRM.N climbed 3% despite guiding fiscal 2027 revenue below Wall Street expectations.

Several sectors including software, financial brokerage, data analytics and legal services, real estate services and trucking clocked heavy losses earlier this year amid growing AI disruption fears.

The S&P 500 .SPX and the Nasdaq .IXIC closed at two-week highs on Wednesday, fueled by a rally in heavyweight technology stocks.

At 10:11 a.m. ET, the Dow Jones Industrial Average .DJI rose 121.68 points, or 0.25%, to 49,603.83, the S&P 500 .SPX lost 25.72 points, or 0.37%, to 6,920.41 and the Nasdaq Composite .IXIC lost 201.10 points, or 0.87%, to 22,950.98.

The information technology index .SPLRCT and the communication services index .SPLRCL were the biggest decliners among the 11 major S&P sectors.

Financials .SPSY gained 1.4%, helping offset some losses. Big banks including JPMorgan Chase JPM.N, Bank of America BAC.N and Wells Fargo WFC.N all rose nearly 1% each.

Investors also monitored the latest round of U.S.-Iran talks in Geneva aimed at resolving their longstanding nuclear dispute and averting new U.S. strikes on Iran following a large-scale military buildup.

Crude oil prices were down around 1%, with the energy stocks index .SPNY down 0.1%.

February has been a choppy month for U.S. equities, with the main indexes swinging sharply between gains and losses as sentiment towards AI and technology stocks waver, with investors questioning if massive planned AI spending is actually paying off.

Among other stocks, Trade Desk TTD.O fell 6% after the advertising technology firm forecast first-quarter revenue below estimates amid mounting pressure from larger rivals.

J.M. Smucker SJM.N jumped 6.6% after the Uncrustables maker beat third-quarter profit and sales estimates. The company also said it had appointed two new directors to its board, after reaching a "constructive engagement" with investor Elliott Investment Management.

C3.ai AI.N fell 16.7% after the software provider forecast current-quarter sales below estimates and said it was cutting 26% of its global workforce.

Celsius Holding CELH.O jumped 14.3% after the energy drink maker reported fourth-quarter revenue above estimates.

Advancing issues outnumbered decliners by a 1.17-to-1 ratio on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.

The S&P 500 posted 26 new 52-week highs and one new low while the Nasdaq Composite recorded 54 new highs and 55 new lows.