* Dow set to snap five-week win streak

* Workday falls after cutting revenue forecast

* Ross Stores rises after Q1 results beat

* Indexes up: Dow 0.18%, S&P 0.77%, Nasdaq 1.21%

NEW YORK, May 24 (Reuters) -

U.S. stocks rose on Friday, recovering some losses suffered in the prior session as data showed improving consumer sentiment on inflation, to put the Nasdaq and S&P 500 on track for a fifth straight weekly gain.

However, the Dow was set to snap its five-week rally a day after registering its largest daily percentage decline in over a year.

The Nasdaq jumped more than 1% on the day.

The Commerce Department said new orders for key U.S.-manufactured capital goods


more than expected in April while the University of Michigan reported that consumers' inflation expectations improved in late May after deteriorating early in the month.

"The data has come in a little better than people thought this morning. Durable goods was a pretty solid number. ... And then consumer sentiment, not great, but not bad, better than people expected," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.

"This is a bounce where people are like maybe things aren't as bad as we thought, maybe there's room for the Fed to cut rates and the economy's going to be OK, and we're not completely falling apart."

The Dow Jones Industrial Average rose 72.07 points, or 0.18%, to 39,137.33, the S&P 500 gained 40.81 points, or 0.77%, at 5,308.65 and the Nasdaq Composite climbed 202.76 points, or 1.21%, to 16,938.79.

Trading volumes were subdued ahead of the Memorial Day market holiday on Monday.

U.S. stocks dropped on Thursday as economic data indicating rising price pressures tempered expectations for interest-rate cuts this year from the Federal Reserve. This overshadowed Nvidia's blowout quarterly results that helped justify investor expectations for growth in artificial intelligence related stocks.

Communication services gained 1.43% as the day's best performing of the 11 major S&P sectors, while tech , consumer discretionary and utilities each gained around 1%.

Markets are pricing in a 49.4% chance for a rate cut at its September meeting, down from 54.8% a week ago, CME's FedWatch Tool showed. Goldman Sachs pushed back its call for a first easing to September from July.

Small-cap stocks, sensitive to interest rates, also rebounded, with the Russell 2000 rising 0.96% after tumbling 1.6% on Thursday.

Workday fell 14.93% after the human resources software provider cut its annual subscription revenue forecast.

Ross Stores rallied 8.5% after posting first-quarter results above estimates and raising its annual profit forecast.

With earnings season largely wrapped up, LSEG data through Friday morning showed that of the 480 companies in the S&P 500 that have reported earnings, 77.9% have topped analysts' expectations, just shy of the 79% beat rate over the past four quarters but above the 67% average since 1994.

Advancing issues outnumbered decliners by a 3.01-to-1 ratio on the NYSE and by a 1.77-to-1 ratio on the Nasdaq.

The S&P index recorded 27 new 52-week highs and five new lows, while the Nasdaq Composite recorded 58 new highs and 101 new lows.

(Reporting by Chuck Mikolajczak; Editing by Richard Chang)