Updates to mid-afternoon trading

By Chuck Mikolajczak

NEW YORK, July 31 (Reuters) - U.S. stocks were well off earlier highs on Thursday, as the Nasdaq and S&P clung to slight gains following the latest swath of corporate earnings and economic data, with results from megacaps Amazon and Apple due after the closing bell.

Microsoft MSFT.O posted a strong earnings report and briefly surpassed the $4 trillion market cap threshold , becoming only the second publicly traded company to ever touch the milestone after Nvidia NVDA.O. Its shares were last up 3.9% after climbing as much as 8.2% on the session.

Meta Platforms META.O jumped 11.9% after hitting a record intraday high of $784.75 as AI-driven growth in its core ad business powered a bullish revenue forecast.

Still, other AI-related names such as chipmakers Broadcom AVGO.O and Nvidia were weaker on the session, pulling the PHLX semiconductor index .SOX down more than 3%.

"Looking at the market action today, you have haves and have-nots, and so you have a couple tech companies, like a lot of the semiconductor-related and semi-cap equipment-related stocks are doing pretty poorly," said Ellen Hazen, chief market strategist at F.L. Putnam Investment Management in Lynnfield, Massachusetts.

"But then, of course, Microsoft is doing pretty well, and the same thing with Amazon and Meta, which are doing really well."

The Dow Jones Industrial Average .DJI fell 130.37 points, or 0.29%, to 44,330.91, the S&P 500 .SPX gained 0.38 points, or 0.01%, to 6,363.28 and the Nasdaq Composite .IXIC gained 56.76 points, or 0.27%, to 21,186.44.

The S&P 500 had risen as much as 1% and the Nasdaq as much as 1.5% earlier in the session. The Nasdaq has not logged a move of at least 1% in either direction since July 3 while the S&P last recorded a daily 1% move on June 24.

Earlier economic data from the Commerce Department report showed inflation picked up in June, with new tariffs pushing prices higher and stoking expectations that price pressures could intensify in the coming months, while weekly initial jobless claims signaled the labor market remained on stable footing.

Investors will now eye Friday's non-farm payrolls report and a looming tariff deadline, as U.S. President Donald Trump was expected to issue higher final duty rates for countries that have not reached an agreement, although Mexico was granted a 90-day reprieve.

U.S. stocks have rallied after a sharp selloff that began in early April after Trump announced a bevy of sharp tariffs, only to rebound as deals have been struck with many trading partners on duty levels. The Dow, S&P 500 and Nasdaq are each on track for their third straight monthly gain.

Drug stocks were also weaker after the White House said Trump sent letters to the CEOs of 17 major pharmaceutical companies, urging immediate action to lower the cost of prescription drugs for Americans. The NYSE Arca pharmaceutical index .DRG was down 2.3%.

Declining issues outnumbered advancers by a 1.38-to-1 ratio on the NYSE, and by a 1.71-to-1 ratio on the Nasdaq.

The S&P 500 posted 33 new 52-week highs and 25 new lows while the Nasdaq Composite recorded 65 new highs and 126 new lows.

(Reporting by Chuck Mikolajczak, additional reporting by Nikhil Sharma and Pranav Kashyap in BengaluruEditing by Marguerita Choy)

((charles.mikolajczak@tr.com; @chuckmik.bsky.social))