SynopsisWall Street edged higher as Fed Chair Kevin Warsh kept inflation and the central bank's 2% target in focus, prompting traders to raise bets on a September rate hike. Chip stocks retreated after Nvidia's AI-fueled rally, while PayPal tumbled and Gap surged following company-specific developments.Listen to this article in summarized formatReutersWall Street's main indexes edged higher on Friday as investors weighed Federal Reserve Chair Kevin Warsh's renewed focus on inflation, while a pullback in chip stocks took some of the momentum out of the previous session's AI-fueled rally.The Dow Jones Industrial Average was up 64.19 points, or 0.12%, at 53,633.63. The S&P 500 gained 12.05 points, or 0.16%, to 7,743.04, while the Nasdaq Composite advanced 30.60 points, or 0.12%, to 26,571.96.Warsh's remarks at the Fed's annual gathering in Wyoming became the latest focus for investors looking for clues on the central bank's interest-rate path. Traders increased their bets on a September rate hike after Warsh said recent inflation data did not suggest a change in trend.Without confidence that inflation is heading clearly and with sufficient speed to the Fed's 2% goal, the central bank would have "more work to do," Warsh said in remarks prepared for delivery to the Fed's Jackson Hole economic symposium in Wyoming.His speech came at the end of a busy week for U.S. markets, with investors digesting earnings from corporate heavyweights including Nvidia and Salesforce as well as fresh economic data. The remarks also drew heightened attention after the U.S. Treasury moved to calm bond markets last week, adding to scrutiny around the direction of monetary policy."There's been a lot of apprehension among investors about staying invested, because some of the stock moves have been uncomfortably high. The inflation data has also become pretty difficult to read because of the energy prices," said Yung-Shin Kung, CIO of Mast Investments."The bigger question for everybody is what (Treasury Secretary) Scott Bessent is looking at, and what the implications of that are for monetary policy."The market's cautious tone was also visible in chip stocks, which gave back some of their gains after Nvidia's blockbuster forecast in the previous session had revived optimism around the AI trade. Investors had pushed semiconductor stocks higher on expectations that accelerating data-center spending would continue to translate into strong revenue growth."For the chip companies, investors are hungry for a new catalyst," said Mike Reynolds, vice president of investment strategy at Glenmede."Markets have gotten their arms around how data center deployment will lead to potentially higher revenues. But the question is, what's next? And it hasn't been obvious in some cases."Nvidia slipped 1.3%, while Marvell Technology fell 7.2% as investors questioned the timing of revenue from its AI chip agreement with Alphabet's Google, despite the company raising its 2027 revenue forecast.Elsewhere, PayPal dropped 11.5% after Bloomberg News reported on Thursday that a consortium of buyout firm Advent and payments processor Stripe had abandoned its pursuit of the payments company.Gap shares climbed 15% after the company named industry veteran Michael Francis as Old Navy's new CEO and raised its annual profit forecast. Ulta Beauty fell 6.1% after comparable sales growth slowed in the second quarter.Market breadth was mixed. Advancing issues outnumbered decliners by a 1.35-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.28-to-1 ratio on the Nasdaq. The S&P 500 recorded three new 52-week highs and two new lows, while the Nasdaq Composite posted 31 new highs and 51 new lows. (Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless(You can now subscribe to our ETMarkets WhatsApp channel)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless