NEW YORK, Aug 24 (Reuters) – U.S. stocks were lower in afternoon trading on Thursday, with the Nasdaq down about 1% after this week’s sharp gains and investors nervous ahead of Federal Reserve Chair Jerome Powell’s speech Friday.

Shares of Nvidia (NVDA.O) were up more than 3% and hit a record high earlier in the session after the company late Wednesday gave a much stronger-than-expected forecast amid demand for its artificial intelligence chips.

All of the major S&P 500 sectors were down on the day, however, including technology (.SPLRCT), and an index of semiconductors (.SOX) was down more than 2%.

Powell’s speech is due Friday at the annual central bank summit in Jackson Hole.

“As much as investors want to focus on Nvidia and want to focus on tech – and it’s been a good year so far – this is still a market that is Fed obsessed. This is still all about what is Jay Powell going to say tomorrow to mess things up… that may lead investors to be sellers instead of buyers,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

The market had gained along with Nvidia ahead of the company’s report on the hope that the news could extend this year’s artificial intelligence tech rally.

The Dow Jones Industrial Average (.DJI) fell 263.24 points, or 0.76%, to 34,209.74, the S&P 500 (.SPX) lost 37.44 points, or 0.84%, to 4,398.57 and the Nasdaq Composite (.IXIC) dropped 156.94 points, or 1.14%, to 13,564.10.

Data earlier showed claims for U.S. unemployment benefits pointed to a still-strong jobs market, news that some say could support the Fed’s hawkish message of higher interest rates for longer. Treasury yields edged higher.

Investors also digested comments from Philadelphia Fed President Patrick Harker, who in an interview on Thursday said the Fed will need to keep rates restrictive for a while.

Dollar Tree (DLTR.O) lost 11.9% after the retailer forecast annual profit largely below estimates.

Declining issues outnumbered advancing ones on the NYSE by a 2.61-to-1 ratio; on Nasdaq, a 2.75-to-1 ratio favored decliners.

The S&P 500 posted 10 new 52-week highs and 13 new lows; the Nasdaq Composite recorded 32 new highs and 195 new lows.

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