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* Futures down: Dow 0.02%, S&P 500 0.01%, Nasdaq 0.2%

July 16 (Reuters) - U.S. stock index futures were subdued on

Thursday as investors paused after a two-day rally, while chip

stocks remained under pressure ahead of fresh economic reports

and another batch of quarterly results.

Chip stocks extended declines from the previous session when

investors rotated into megacap technology names and banks

following strong results from major lenders.

U.S.-listed shares of TSMC fell 3.2% in premarket

trading, even after the advanced AI chipmaker reported a 77%

jump in second-quarter profit that topped market expectations.

The company also said it would invest an additional $100 billion

in the United States.

Memory-chip makers were among the biggest decliners, with

Western Digital ( WDC ) and Seagate Technology ( STX ) down 3.9%

and 3.3%, respectively.

Wall Street's main indexes rose for a second straight

session on Wednesday after a softer-than-expected Producer Price

Index reading eased inflation concerns and reduced worries over

tighter Federal Reserve policy. The report followed benign

consumer inflation data earlier in the week.

A strong start to the second-quarter earnings season also

supported sentiment, even as U.S.-Iran tensions simmered in the

background.

"While geopolitical dynamics may trigger setbacks, earnings

should remain the key driver of performance for the remainder of

the year," said Mark Haefele, chief investment officer at UBS

Global Wealth Management.

"In fact, with the U.S. second-quarter earnings season

kicking off with solid beats, we expect another strong set of

results in the coming weeks."

At 5:18 a.m. ET, Dow E-minis were down 9 points, or

0.02%, and S&P 500 E-minis were down 1 point, or 0.01%.

Nasdaq 100 E-minis were down 63.75 points, or 0.21%.

Moving ahead in the day, investors will be looking to retail

sales data and jobless claims at 8:30 a.m. ET for further signs

of whether the economy is slowing enough to keep inflation under

control without sparking growth concerns.

Markets are currently pricing in a 10.2% likelihood that the

Fed will implement a 25-basis-point rate hike at this month's

monetary policy meeting, according to CME's FedWatch tool.

The benchmark S&P 500 has climbed more than 10% this

year and remains near its June record close, leaving the rally

vulnerable to any disappointment in data or earnings.

United Airlines fell 2.3% as a renewed surge in oil

prices weighed on its third-quarter and full-year profit

outlooks.

Further on the earnings front, UnitedHealth ( UNH ) will

report its results before the bell and Netflix ( NFLX ) is

scheduled to report its after the market's close.