Jan 23 (Reuters) - The Dow Jones Industrial Average slipped on Friday, while the S&P 500 struggled for positive momentum, as investors' risk appetite was dimmed at the end of a topsy-turvy week by Intel's plunge on a downbeat outlook.

All three Wall Street benchmarks had rebounded in the past two sessions following Tuesday's sharp selloff triggered by U.S. President Donald Trump's threats to impose tariffs on European allies, an effort to pressure them to accept his claims to Greenland. 

Despite a somewhat limited pullback on the final trading day of a truncated week, investors appeared to remain confident that while geopolitical-induced volatility is a present danger, the overall state of the American economy continues to be robust. 

"Even if we get more volatility, there is an outlook today where there is a lot more confidence in being able to put money into other areas outside of artificial intelligence," said Michael Kantrowitz, chief investment strategist at Piper Sandler.

While tempered by a 1.9% decline on Friday, the small-cap Russell 2000 index is still up roughly 7.5% so far in 2026.

Weighing on sentiment for the main indexes on Friday was chipmaker Intel, which sank 17.8%. The company forecast quarterly revenue and profit below market estimates, saying it struggled to satisfy demand for its server chips used in AI data centers.

At 1:59 p.m. Eastern time, the S&P 500 was flat at 6,913.20 points, while the Dow Jones Industrial Average fell 333.98 points, or 0.68%, to 49,050.03. The only gainer was the Nasdaq Composite, which advanced 77.61 points, or 0.33%, to 23,513.63.

MAG 7 EARNINGS TEST

Many of the so-called Magnificent Seven stocks, including Apple, Tesla and Microsoft , are set to report earnings next week. Traders will be listening closely to management outlooks for clues on how much runway is left in the growth narrative that has helped prop up their premium valuations.

Ahead of these numbers, megacaps were mixed on Friday. Tesla, Alphabet and Apple all traded with modest declines.

Microsoft, Meta and Amazon rose between 2% and 3.8%. Nvidia rose 1.8% after Bloomberg News reported Chinese officials have told Alibaba, Tencent and ByteDance they can prepare orders for Nvidia's H200 AI chips. 

Given the broadening out of the market, as well as solid economic data and factors such as tax rebates, Piper Sandler's Kantrowitz noted there was less of a sense though that Magnificent Seven earnings are as pivotal for overall sentiment as in recent quarters.

"While tech earnings are, obviously, still very important and a big part of the market, there is less of a pure focus on how those numbers are and how that determines what the overall market does," he said.

FED AWAITED

The Federal Reserve is expected to hold rates at 3.5%-3.75% next week, but investors will comb through the statement and Chair Jerome Powell's remarks for signals on what is next. The CME Group's FedWatch tool shows markets penciling in the first cut for June. 

U.S. economic signals were broadly steady to start the year. 

Business activity held firm in January as firmer new orders helped offset a still-soft jobs picture, S&P Global's flash PMI showed. Meanwhile, the University of Michigan survey showed consumer sentiment improving across the board this month.

(Reporting by Sruthi Shankar and Pranav Kashyap in Bengaluru and David French in New York; Editing by Krishna Chandra Eluri and Aurora Ellis)

By comparison, the three main benchmarks have gained between 1% and 2% over the same time period.