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US economic growth revised lower for first quarter

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Dollar General ( DG ) beats Q1 sales estimates, shares rise

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Tesla up after report on push to roll out advanced FSD in

China

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Futures off: Dow 0.80%, S&P 0.31%, Nasdaq 0.24%

(Updated at 9:03am ET/1303 GMT)

By Johann M Cherian and Lisa Pauline Mattackal

May 30 (Reuters) -

Wall Street futures pared early losses but stayed on track

for a lower open as investors parsed data that showed the

economy grew less than previously expected in the first quarter,

stoking hopes for an earlier start to the Federal Reserve's rate

cuts.

U.S. gross domestic product for the first quarter was

lowered to a growth of 1.3%, compared with a previously

estimated 1.6% expansion, as a result of downward revisions to

consumer spending, the

Commerce Department reported

.

Ahead of Friday's personal consumption expenditure

report for April - the Fed's preferred inflation gauge -

preliminary data showed the core Personal Consumption

Expenditures Price Index rose 3.6% in the first quarter, versus

an expected 3.7% increase.

U.S. Treasury yields dipped following the report, while

chances for an at least 25-basis-point interest rate reduction

in September edged up to nearly 52%, from 48.7% seen before the

data landed, according to the CME Group's FedWatch Tool.

Separately, the number of Americans filing new claims

for unemployment benefits stood at 219,000, versus a forecast

for 218,000 new claims.

Uncertainty over monetary policy, combined with heavy

new Treasury issuance, has pushed bond yields higher, pressuring

stocks. Rising bond yields typically reflect expectations of

higher interest rates, which in turn means costlier financing

and smaller profit margins for companies.

"Less economic growth isn't necessarily all that

negative because we're still in a growth pattern, and the good

news is that inflation measured by the PCE was revised down...

that will help alleviate pressures in the bond market and could

cause stocks to stabilize," said Peter Cardillo, chief market

economist at Spartan Capital Securities.

The benchmark S&P 500 Index is on track for its

biggest weekly drop in six, while the blue-chip Dow

closed at a four-week low on Wednesday.

Hawkish commentary from policymakers has also dampened risk

sentiment. Traders will assess remarks from New York Fed

President John Williams and Dallas Fed President Lorie Logan

later in the day.

At

9:03

a.m. ET, Dow e-minis

were down 307 points, or 0.8

0

%

, S&P 500 e-minis

were down 16.5 points, or 0.31%

, and Nasdaq 100 e-minis

were down 45.5 points, or 0.24%

.

Dow component Salesforce ( CRM ) forecast second-quarter

profit and revenue below Street estimates due to weak client

spending on its cloud and enterprise business products, sending

its shares down 16.4% in premarket trading.

Meanwhile, HP gained

4.7

% after beating Wall Street estimates for second-quarter

revenue on Wednesday.

Tesla gained

1.5

% after Reuters reported the company was preparing to

register its

'Full Self-Driving' software

in China.

American Eagle Outfitters ( AEO ) dropped 9.5% after the

retailer posted downbeat quarterly revenue as sticky inflation

hurt demand for its apparel and accessories, often sold

full-price.

Dollar General ( DG ) rose 1.9% after the discount retailer

posted upbeat first-quarter sales. However, department-store

chain Kohl's slumped 24.6% after cutting its annual

sales and profit forecasts.

Moderna ( MRNA ) added 2.3% after a report said the U.S.

government was nearing an agreement to fund a late-stage trial

of the drugmaker's pandemic bird flu vaccine.

After the United States switched to faster trade

settlements for securities, market participants reported some

processing bumps, although the move has been smooth overall.