(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window)
* Investors still assessing Wednesday's Fed minutes
* Kohl's slashes 2022 forecasts
* Indexes: Dow down 0.2%, S&P 500 up 0.2%, Nasdaq up 0.3% (Updates to afternoon trading; changes byline, adds NEW YORK dateline)
By Caroline Valetkevitch
NEW YORK, Aug 18 (Reuters) - The S&P 500 and Nasdaq were up slightly in afternoon trading Thursday as Cisco Systems shares jumped on an upbeat sales forecast, but trading was choppy as investors assessed the outlook for interest rate hikes.
Investors initially saw Wednesday's minutes from the Federal Reserve's July meeting as suggesting policymakers may be less aggressive than previously thought when they raise interest rates in September.
But the minutes did not clearly hint at the pace of rate increases and showed policymakers committed to raising rates to tame inflation.
"We're at a point where people are trying to make a judgment about whether the inevitable higher interest rates are going to choke off the upside of the market," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
"There are really two camps - one who feels the worst is behind us and continue to buy these selloffs, and the camp that feels the worst is ahead of us and like this is some kind of bear market rally that will retreat."
Traders at this point expect a greater chance of a 50 basis point rise in borrowing costs in September instead of a 75 basis point increase for a third time.
Meanwhile, Cisco gained 6% and was among the biggest positives on the S&P 500 and Nasdaq, after it provided an upbeat forecast for first-quarter sales late on Wednesday as a COVID-19 recovery in China eases supply chain shortages.
The Dow Jones Industrial Average fell 54.87 points, or 0.16%, to 33,925.45, the S&P 500 gained 7.34 points, or 0.17%, to 4,281.38 and the Nasdaq Composite added 38.85 points, or 0.3%, to 12,976.98.
Supporting the view that the Fed may need to be more hawkish, data Thursday showed solid momentum on the U.S. economic front.
The Philadelphia Federal Reserve's monthly manufacturing index rose to 6.2 this month from negative 12.3 in July, topping all 30 estimates in a poll of Reuters economists.
The Fed has lifted its benchmark interest rate by 225 basis points so far this year to control inflation at a four-decade high.
Focus now could turn to the Fed's annual Jackson Hole symposium late next week.
Other gainers in high-growth stocks included Nvidia , which was up 2.4%.
Among the day's decliners, Kohl's Corp stock slid 6.6% after the retailer cut its full-year sales and profit forecasts. The news followed a dissapointing report from Target on Wednesday.
Still, after a brutal start of the year, stocks have jumped since mid-June, partly because of upbeat earnings.
After the recent big move and with second-quarter earnings nearly done, the market may be "at a little bit of an equilibirum," Meckler said.
Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.00-to-1 ratio favored advancers.
The S&P 500 posted four new 52-week highs and 29 new lows; the Nasdaq Composite recorded 51 new highs and 58 new lows. (Additional reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Deepa Babington)