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Target ( TGT ) forecasts FY comparable sales above estimates

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Apple ( AAPL ) drops after China iPhone sales plunge

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AMD falls after report US blocks sale of AI chip to China

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Futures down: Dow 0.25%, S&P 0.30%, Nasdaq 0.51%

(Updated at 8:20 a.m. ET/1320 GMT)

By Bansari Mayur Kamdar and Amruta Khandekar

March 5 (Reuters) -

Wall Street was set to open lower on Tuesday as megacap

stocks were under pressure ahead of a slew of economic data and

several key events this week, including appearances from Federal

Reserve Chair Jerome Powell.

An AI-fueled rally on Wall Street ran out of steam at the

start of this week as focus turns to fresh cues on the Fed's

monetary policy path after signs of sticky inflation in February

dampened hopes of early interest rate cuts.

The benchmark S&P 500 hit a fresh intraday record

high on Monday before closing slightly lower in the run up to

Powell's testimony before lawmakers on Wednesday and Thursday.

"I think he's going to continue to reiterate that the

narrative is going to be rate cuts may be coming (but) there's

no immediate plan to cut them. Thus you see some of the angst in

the tech space," said Ken Polcari, chief market strategist at

Slatestone Wealth.

Apple ( AAPL ) slid 2.2% premarket after a research report

showed iPhone sales in China fell 24% year-on-year in the first

six weeks of 2024 as the U.S. company faced increased

competition from domestic rivals such as Huawei.

Other megacap growth and technology stocks also declined,

with Tesla down 2.5% after its European Gigafactory

near Berlin halted production after a suspected arson attack.

AI-darling Nvidia ( NVDA ) bucked the trend to rise 1.4%.

A reading on the U.S. services sector for February and

factory orders data for January due at 10:00 a.m. ET could

provide further insight into the health of the U.S. economy and

the outlook for rates.

A raft of employment data, including the crucial nonfarm

payrolls report, is also due in the coming days.

Traders see a 65.5% chance of the first rate cut this year

arriving in June, as per CME Group's FedWatch tool.

The Fed is under no urgent pressure to cut interest rates

given a "prospering" economy and job market, Atlanta Fed

President Raphael Bostic said in remarks on Monday, adding to

worries about rates being higher-for-longer.

Investors will be closely looking at speeches by other Fed

policymakers including Vice Chair for Supervision Michael Barr,

who is due to speak later in the day.

Among major movers, Target ( TGT ) jumped 7.7% in premarket

trading after the big-ticket retailer forecast annual comparable

sales largely above estimates, betting on same-day services,

product launches and a new membership program to boost spending.

At 8:20 a.m. ET, Dow e-minis were down 96 points,

or 0.25%, S&P 500 e-minis were down 15.25 points, or

0.3%, and Nasdaq 100 e-minis were down 93.5 points, or

0.51%.

Advanced Micro Devices ( AMD ) fell 1.5% after a report that

the chipmaker hit a U.S. government roadblock in its efforts to

sell an artificial intelligence chip tailored for the Chinese

market.

Microstrategy ( MSTR ) shed 2.7% after the bitcoin

development company announced a private offering for $600

million in convertible senior notes, with proceeds to be used to

buy bitcoin.

Other major cryptocurrency-linked firms such as Riot

Platforms ( RIOT ) and Marathon Digital ( MARA ) fell 1.7% and

2.9%, respectively, with bitcoin hovering below a two-year peak.