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Palo Alto shares slump after results

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Lowe's rises after smaller-than-expected drop in Q1 sales

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Li Auto delays pure electric SUV launch, shares fall

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Futures: Dow up 0.03%, S&P down 0.01%, Nasdaq down 0.15%

(Updated at 8:25 a.m. ET)

By Ankika Biswas and Lisa Pauline Mattackal

May 21 (Reuters) - The main U.S. indexes were set for a

muted open on Tuesday, as investors refrained from placing big

bets before AI chip leader Nvidia's ( NVDA ) earnings this week and amid

policy caution from Federal Reserve officials ahead of the

central bank's meeting minutes.

Rate-setters have offered few clues on the timing for rate

cuts this year and several Fed officials on Monday refrained

from noting inflation moderating to the 2% target despite recent

data pointing to easing consumer price pressures.

That weighed on market sentiment, with investors now

awaiting remarks during the day from officials including

Christopher Waller, Thomas Barkin, Raphael Bostic and Michael

Barr ahead of the Fed's latest policy meeting minutes on

Wednesday.

"On our inflation forecast, we continue to expect the Fed to

deliver the first cut in December... An earlier cut is possible,

but it likely requires a string of more favorable inflation

prints and some softening in labor market data," Deutsche Bank

Research analysts said in a note.

Traders currently factor in about 42 basis points of Fed

rate reductions this year, with a quarter-point cut fully priced

in for November.

Technology stocks kicked off the week on a strong note,

driving the tech-heavy Nasdaq to its highest closing

level on Monday while the S&P 500 inched closer to its

all-time high hit last week.

Nvidia's ( NVDA ) quarterly earnings on Wednesday are in

focus, likely to be a significant market trigger and a litmus

test for the success of the generative AI boom.

Data from options analytics firm Trade Alert showed Nvidia's ( NVDA )

options are primed for an 8.7% swing in either direction by

Friday, translating to a market cap swing of $200 billion.

"In Nvidia's ( NVDA ) case, the confidence around the artificial

intelligence boom is more than just hype... It has real

substance," said Derren Nathan, head of equity research,

Hargreaves Lansdown.

Nvidia's ( NVDA ) shares were up 0.4% in premarket trading.

At 8:25 a.m. ET, Dow e-minis were up 12 points, or

0.03%, S&P 500 e-minis were down 0.75 points, or 0.01%,

and Nasdaq 100 e-minis were down 27.5 points, or 0.15%.

Palo Alto Networks ( PANW ) dropped 6% after its

fourth-quarter billings forecast disappointed investors, while

Lowe's Cos rose 3% after the retailer's quarterly sales

slowed less than forecast.

Macy's gained 3.5% after the department store operator

raised the low end of its annual sales forecast, despite posting

a bigger-than-expected drop in sales for the first quarter.

Peloton Interactive ( PTON ) fell 6.4% as the fitness

equipment maker was looking to refinance its debt to regain its

footing amid falling sales.

U.S.-listed shares of Li Auto lost 3.3% after the

Chinese firm postponed plans to launch pure electric SUV models

to next year.