US STOCKS-Indexes end down ahead of Nvidia results; chip designers fall late

By Caroline Valetkevitch

NEW YORK, May 28 (Reuters) - U.S. stock indexes closed lower on Wednesday as investors digested minutes from the last Federal Reserve meeting and shares of chip designers fell in late trading.

Investors also awaited results from Nvidia, NVDA.O due after the closing bell. Nvidia shares ended down 0.5%.

Shares of Cadence Design Systems CDNS.O and Synopsys SNPS.O fell in late trading after the Financial Times reported that the Trump administration has ordered U.S. firms that offer software used to design semiconductors to stop selling their services to Chinese groups. The FT report cited people familiar with the move.

According to the minutes of the Fed's May 6-7 session, U.S. central bank officials acknowledged they could face "difficult tradeoffs" in coming months in the form of rising inflation alongside rising unemployment.

"The Fed minutes really didn't reveal anything new," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "They basically indicate the Fed is in a wait-and-see mode and staying the line, trying to get more clarifications on trade."

U.S. President Donald Trump backed down over the weekend from his threat of 50% tariffs on imports from the European Union, driving stocks up sharply on Tuesday.

Traders in options markets were bracing for industry-wide volatility, with defensive options contracts drawing heavy attention for the VanEck Semiconductor ETF SMH.O, the largest semiconductor ETF.

The Dow Jones Industrial Average .DJI fell 244.95 points, or 0.58%, to 42,098.70, the S&P 500 .SPX lost 32.99 points, or 0.56%, to 5,888.55 and the Nasdaq Composite .IXIC lost 98.23 points, or 0.51%, to 19,100.94.

The S&P 500 is still down from its record closing high, reached on February 19. It fell as much as 18.9% below that level in the wake of Trump's erratic tariff announcements that have whipsawed markets for much of his second term.

A poll of strategists and analysts conducted by Reuters showed that many market participants expected the benchmark index to finish the year near current levels.

Shares of sportswear retailer Dick's Sporting Goods DKS.N gained 1.7% after its first-quarter results beat estimates.

Declining issues outnumbered advancers by a 2.79-to-1 ratio on the NYSE. There were 103 new highs and 34 new lows on the NYSE.

On the Nasdaq, 1,448 stocks rose and 2,960 fell as declining issues outnumbered advancers by a 2.04-to-1 ratio.