GLOBAL MARKETS-US stock indexes mostly edge higher but Nvidia shares slip; dollar weakens

(Updates to midday)Dollar lower as focus turns to Fed policy easingMajor US stock indexes edge upNvidia shares down slightlyBy Caroline ValetkevitchNEW YORK, Aug 28 (Reuters) - Most major U.S. stock indexes were slightly higher on Thursday even as Nvidia shares slipped amid uncertainty over its China business, while the dollar weakened against the euro and yen as traders anticipated U.S. interest rate cuts soon.Nvidia’s shares (NVDA.O) were down about 1.1% as questions around the Sino-U.S. trade war clouded a better-than-expected revenue forecast from the chip designer, released after Wednesday’s market close. Nvidia’s outlook was above Wall Street expectations but disappointed some investors accustomed to blowout results.But the Dow, S&P 500 and Nasdaq were all slightly higher, and an index of semiconductor stocks (.SOX) was up 0.4%.Investors were mostly breathing a sigh of relief over Nvidia’s results and guidance, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.While there’s some confusion over what will happen with China, Nvidia “didn’t say anything that pointed to a significant slowdown in anything, so that took away a major risk or overhang this morning,” he said.Nvidia CEO Jensen Huang also dismissed concern about an end to a spending boom on AI chips and said opportunities will expand over the next five years.Another plus for stocks was economic data, Tuz said. The day’s data showed the U.S. economy grew faster than initially thought in the second quarter, in part driven by business investment in intellectual property such as AI.The Dow Jones Industrial Average (.DJI) rose 5.97 points, or 0.01%, to 45,571.20, the S&P 500 (.SPX) was up 5.11 points, or 0.08%, to 6,486.51 and the Nasdaq Composite (.IXIC) rose 57.08 points, or 0.26%, to 21,646.27.MSCI’s gauge of stocks across the globe (.MIWD00000PUS) rose 1.53 points, or 0.16%, to 954.57.The pan-European STOXX 600 (.STOXX) index fell 0.16%.Concerns over France’s fiscal path are likely to stay in focus for European markets following Prime Minister Francois Bayrou’s gamble to win backing for his deeply unpopular debt-reduction plan via a confidence vote next month.The euro (EUR=) was up 0.29% at $1.1671. Against the Japanese yen (JPY=) , the dollar weakened 0.26% to 147.Investors are keen to find out more about prospects for interest rate cuts ahead of the Federal Reserve’s September 16-17 policy meeting.On Wednesday, New York Fed bank President John Williams said it is likely interest rates can fall at some point but policymakers will need to see what upcoming data indicate about the economy to decide if it’s appropriate to make a cut at the September meeting.Traders currently are pricing in 87% odds of a quarter-point rate cut in September, according to CME’s FedWatch tool. In total, they see 137 basis points of cuts by the end of 2026.Also key this week will be a report Friday on U.S. personal consumption expenditures - the Fed’s preferred inflation measure.Investors were still digesting news on Federal Reserve Governor Lisa Cook. Cook filed a lawsuit on Thursday claiming U.S. President Donald Trump has no power to remove her from office, setting up a legal battle that could reset long-established norms for the U.S. central bank’s independence.Interest rate-sensitive two-year yields rose but held near an almost four-month low as traders weighed prospects for Fed rate cuts.The two-year note yield (US2YT=RR) was last up 1.4 basis points at 3.637%. The benchmark 10-year note (US10YT=RR) fell 0.8 basis points to 4.23%.U.S. crude (CLc1) fell 0.89% to $63.59 a barrel and Brent (LCOc1) fell to $67.64 per barrel, down 0.63% on the day.