Updates to 10:58 EDT

By Stephen Culp

NEW YORK, May 23 (Reuters) -Wall Street was lopsided on Thursday as Nvidia Corp's quarterly results sparked a rally in tech stocks, while investors continued to parse mixed economic data and cautious signsthis week fromthe U.S. Federal Reserve.

U.S. Treasury yields turned higher after the data.

The tech-heavy Nasdaq was the clear leader, with the S&P 500 down modestly.

The blue-chip Dow, meanwhile, was sharply lower.

"Folks are pretty full of Nvidia; there’s only so much one stock can do for the rest of the market," said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina. "It’s not an atypical reaction, there's some position squaring and some taking of profits ahead of the holiday weekend."

Semiconductor stocks .SOX were given a jolt of adrenaline by Nvidia NVDA.O, the megacap chipmaker at the forefront of AI optimism, when the company forecast quarterly revenue above estimates and announced a stock split.

On the economic front, new home sales fell more than expected but initial jobless claims dipped, and a preliminary survey showed U.S. business activity has expanded faster than economists forecast in May.

The data is largely viewed through the lens of the Fed, the timing of its first interest rate cut, and whether the central bank can rein in inflation without triggering recession.

"Good news is good news, but incredibly good news is not," Ladner added. "If economic data got really hot it could release the Fed rate-hike genie from the bottle."

The Dow Jones Industrial Average .DJI fell 296.36 points, or 0.75%, to 39,374.68, the S&P 500 .SPX lost 5.74 points, or 0.11%, to 5,301.27 and the Nasdaq Composite .IXIC added 49.21 points, or 0.29%, to 16,850.76.

European shares rode the Nvidia wave, and were further bolstered by a survey which showed euro zone business activity has expanded this month as its fastest pace in a year.

The pan-European STOXX 600 index .STOXX lost 0.07% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.15%.

Emerging market stocks lost 0.34%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.26% lower, while Japan's Nikkei .N225 rose 1.26%.

U.S. Treasury yields turned higher after data suggested U.S. business activity has picked up and the labor market remains tight, supporting the Fed's "higher for longer" narrative.

Benchmark 10-year notes US10YT=RR last fell 13/32 in price to yield 4.4846%, from 4.434% late on Wednesday.

The 30-year bond US30YT=RR last fell 21/32 in price to yield 4.5902%, from 4.55% late on Wednesday.

The dollar held its ground against a basket of world currencies after a swath U.S. and euro zone economic data.

The dollar index .DXY fell 0.01%, with the euro EUR= up 0.01% to $1.0822.

The Japanese yen weakened 0.11% versus the greenback at 156.97 per dollar, while Sterling GBP= was last trading at $1.2709, down 0.05% on the day.

Crude oil prices rebounded, clawing back some of the three previous days' losses, despite fears that "higher for longer" interest rates could dampen demand.

U.S. crude CLcv1 fell 0.26% to $77.37 per barrel and Brent LCOcv1 was last at $82.14, up 0.29% on the day.

Gold prices dropped to a one-week low in the aftermath of the Fed minutes' release.

Spot gold XAU= dropped 1.4% to $2,345.29 an ounce.

Reporting by Stephen Culp; Additional reporting by Amanda Cooper in London; Editing by Andrew Cawthorne

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA