Updates with late-morning trading

By Niket Nishant and Sukriti Gupta

Oct 7 (Reuters) - Wall Street's main indexes declined on Tuesday after a report from the New York Federal Reserve highlighted simmering anxiety over the job market, halting a rally that had pushed the S&P 500 and the Nasdaq to record closing highs a day earlier.

After seven days of a government shutdown in the U.S. hindering key data releases, the September report from the NY Fed showed that the expected level of inflation a year from then was 3.4%, compared with 3.2% in August.

Economists monitor these secondary readings because shifts in how households view inflation and employment can influence their spending decisions, while investors look to evaluate equity valuations more closely.

At 11:51 a.m. ET, the Dow Jones Industrial Average .DJI fell 163.36 points, or 0.35%, to 46,531.61, the S&P 500 .SPX lost 39.63 points, or 0.59%, to 6,700.65 and the Nasdaq Composite .IXIC lost 217.03 points, or 0.95%, to 22,723.03.

"The bottom line is that the labor market is at a standstill," according to Apollo Global's chief economist Torsten Slok.

Separately, Federal Reserve Governor Stephen Miran reiterated his dovish stance on Tuesday, saying that keeping monetary policy restrictive will be risky.

Traders expect the Fed to cut interest rates by 25 basis points at its meeting later this month, due to a string of reports from last week suggesting a weakening job market.

The S&P 500 tech .SPLRCT sector fell 0.9% with Microsoft MSFT.O down 1%, while Broadcom AVGO.O, Oracle ORCL.N and Lam Research LRCX.O declined 2.4%, 5.8%, and 4.2%, respectively.

The losses in tech stocks also weighed on the Nasdaq.

Jefferies upgraded AMD's rating to "buy" and multiple other brokerages raised their price target on the stock, sending it 2.9% higher a day after the chipmaker's supply deal with OpenAI bolstered the tech rally.

Financials .SPSY fell 0.17% on the S&P 500, and consumer discretionary stocks .SPLRCD lost 1.4%. Tesla TSLA.O was down 3.7% ahead of an event where it is expected to unveil a more affordable version of its best-selling Model Y SUV.

Some analysts expect the upcoming earnings season will grab more focus with forecasts and executive commentary likely to carry more weight in shaping expectations.

Among stocks, Corona beer maker Constellation Brands STZ.N gained 3.8% after posting a smaller-than-expected drop in second-quarter sales.

IBM IBM.N shares hit a record high and were last up 2.1% after announcing a partnership with AI startup Anthropic.

U.S.-listed shares of Trilogy Metals TMQ.N soared 216.7% after the White House said it would acquire a 10% stake in the company.

AppLovin APP.O surged 6.9%, recouping nearly half of its losses from the prior session, and topped the S&P 500 after brokerages Citi Research and Oppenheimer allayed concerns after the SEC probe report.

Declining issues outnumbered advancers by a 1.86-to-1 ratio on the NYSE. There were 279 new highs and 50 new lows on the NYSE and by a 2.18-to-1 ratio on the Nasdaq.

The S&P 500 posted 35 new 52-week highs and 7 new lows while the Nasdaq Composite recorded 105 new highs and 47 new lows.

(Reporting by Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath)

((Niket.Nishant@thomsonreuters.com;))