* Futures: Dow up 0.88%, S&P up 0.07%, Nasdaq down 0.78%

* Chip stocks lead declines in premarket trading

* Amazon ( AMZN ), Meta, Apple ( AAPL ) and Microsoft ( MSFT ) to report later this

week

* Coca-Cola, Boeing ( BA ) gain after quarterly results

(Updates to before markets open)

By Johann M Cherian and Ragini Mathur

July 28 (Reuters) - The Nasdaq was set to open lower on

Tuesday, mirroring a cautious mood across global markets toward

AI chip stocks on concerns about hefty corporate spending and

rising Chinese competition, ahead of earnings from some of the

biggest companies on Wall Street.

Chip majors such as Micron slid 6.4%, Intel ( INTC )

shed 4.8% and Applied Materials ( AMAT ) lost 4.5% in premarket

trading, while U.S.-listed shares of Taiwan's TSMC and

Korea's SK Hynix fell over 3% each. Nvidia ( NVDA )

dipped 0.4%.

Global markets have become increasingly volatile this month

as investors scrutinize the need for more corporate spending on

AI infrastructure such as semiconductors that underpinned strong

gains in chip stocks in the previous quarter.

Roundhill's Memory Exchange Traded Fund lost 7.8%

on Tuesday and has been trading below its 50-day moving average

for the past two weeks, reflecting weak short-term momentum,

while the Philadelphia SE Semiconductor Index has fallen

over 20% from its all-time high hit in June.

Signs that Wall Street's biggest companies such as Alphabet

and Tesla are running out of cash to fund

their ambitions have also made markets nervous, while China

showcases cheaper AI models and deepens its presence in the

competitive semiconductor industry.

"The market is extremely concerned about the level of

spending that's been going on from the hyperscalers. These huge

dollar amounts feel irresponsible at this point," Robert Pavlik,

senior portfolio manager at Dakota Wealth said.

When AI hyperscalers Amazon.com ( AMZN ), Meta,

Apple ( AAPL ) and Microsoft ( MSFT ) report earnings later this

week, investors will be keen to see if their investments, worth

over several hundred billion dollars, are yielding returns. The

reports are also expected to offer clues on the demand for chips

and other AI infrastructure.

Shares of the four U.S. companies were marginally higher on

Tuesday.

At 08:36 a.m. ET, Dow E-minis were up 461 points, or

0.88%, and S&P 500 E-minis were up 5.5 points, or 0.07%.

Nasdaq 100 E-minis were down 218.5 points, or 0.78%.

Dow component Coca-Cola gained 4% as the beverage

company raised its annual revenue and profit forecasts.

Other consumer staples companies such as Walmart and

Procter & Gamble ( PG ) also added about 2% each.

Boeing ( BA ) gained 0.6% after the airplane maker generated

positive free cash flow as its turnaround plans gained momentum.

The Federal Reserve is due to announce its interest-rate

decision on Wednesday. Traders see a 37% chance of a rate hike

this week, according to LSEG data, and expect borrowing costs to

rise by at least 25 basis points by year-end.

Higher rates could further pressure AI companies that are

becoming more dependent on debt financing.

Oil prices offered some relief, falling 1.8% to a one-week

low as a fragile U.S.-Iran ceasefire appeared to hold despite

reports of drone attacks in Saudi Arabia, Jordan and Iraq.

President Donald Trump said the U.S. was having "good talks"

with Iran and that a deal to end the conflict was possible.

Later on Tuesday, the Conference Board's July consumer

confidence report could provide a clearer picture of how the

conflict is affecting household sentiment.

Johnson & Johnson ( JNJ ) rose 2% after saying it would pay

an estimated $5.5 billion to resolve tens of thousands of

lawsuits alleging its talc products caused cancer.