By Johann M Cherian and Pranav Kashyap

(Reuters) - U.S. stock index futures edged higher on Tuesday following this year's biggest one-day drop for Wall Street's main indexes in the previous session, while disappointing forecasts from Kohl's and Delta stoked worries about a slowing economy.

On Monday, the S&P 500 recorded its steepest one-day decline since December 18 on fears the Trump administration's tariff policies could spark a debilitating trade war.

The tech-heavy Nasdaq also experienced its largest percentage drop since September 2022, having already confirmed a 10% correction late last week.

The selloff erased $4 trillion from the S&P 500's peak just last month.

Reflecting slowing consumer demand, Kohl's forecast a bigger-than-expected drop in annual comparable sales, sending the retailer's shares down 15.3%.

Delta Air Lines slid 8.2% after the carrier slashed its first-quarter profit estimates by half as CEO Ed Bastian blamed heightened U.S. economic uncertainty.

Peers United Airlines and American Airlines dropped 5.6% and 3.9%, respectively.

"The American narrative is fading. Trump's disruptive trade policies are hitting home, sparking fears of inflation and dampening sentiment on Wall Street," said Nikos Tzabouras, market analyst at Tradu.

"These two to three months will remain challenging for U.S. markets and we could see even deeper losses from here."

At 07:09 a.m. ET, Dow E-minis were up 61 points, or 0.15%, S&P 500 E-minis were up 8.5 points, or 0.15%, and Nasdaq 100 E-minis were up 29.5 points, or 0.15%.

Futures tracking the domestically focused Russell 2000 index rose 1%.

The CBOE market volatility index dipped slightly after closing at its highest level since August.

Focus will be on the Labor Department's Job Openings and Labor Turnover Survey, which is due later in the day. A closely watched inflation report is expected later in the week.

Interest rate futures point to the U.S. Federal Reserve leaving borrowing costs unchanged at its meeting next week, but they also have penciled in that the central bank could lower borrowing costs by at least 75 basis points by December on expectations of slowing growth.

Adding to the dour mood, Citi became the latest brokerage to revise its stance on U.S. stocks, downgrading its recommendation from "overweight" to "neutral."

Focus will also be on voting related to a funding bill at Capitol Hill to avert a partial federal government shutdown.

Megacap stocks Meta and Amazon.com edged up 0.2% and 0.1%, respectively, before the bell. Tesla added 1.7% after the stock fell 15.4% in the previous session.

JPMorgan Chase and Bank of America were marginally higher.

Oracle dropped 1.3% after the cloud company missed quarterly revenue estimates.

U.S.-listed shares of Chinese stocks Xpeng and Alibaba rose 9.4% and 3.6%, respectively. Citi upgraded Chinese shares to "overweight".

Despite the volatility, stock market valuations remain substantially higher than historical averages, according to LSEG Datastream.