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Zscaler ( ZS ) jumps after upbeat annual revenue forecast

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Kroger ( KR ) forecasts annual profit below estimates

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Alibaba's AI reasoning model drives shares higher

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Weekly jobless claims stand at 221,000

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Futures off: Dow 0.85%, S&P 500 1.14%, Nasdaq 1.52%

(Updates before markets open)

By Johann M Cherian and Sukriti Gupta

March 6 (Reuters) -

Wall Street's main indexes were set to open lower on

Thursday as uncertainty about a trade war unleashed by U.S.

tariffs clouded sentiment, while chip stocks slid after

Marvell's ( MRVL ) forecast fanned worries of slowing demand for AI

infrastructure.

At 8:43 a.m. ET, Dow E-minis were down 368

points, or 0.85%, S&P 500 E-minis were down 66.75

points, or 1.14% and Nasdaq 100 E-minis were down 315

points, or 1.52%.

Marvell ( MRVL ) fell 17.6% in premarket trading after the

chipmaker forecast first-quarter sales in line with analysts'

average estimate, which failed to excite investors who had

expected stronger AI-driven growth.

Peer Broadcom ( AVGO ), which is expected to report

quarterly results after markets close, fell 4.5%, while Nvidia ( NVDA )

lost 3.2% and Advanced Micro Devices ( AMD ) dropped

2%.

Megacaps such as Microsoft ( MSFT ) and Meta

declined over 1% each.

Concerns about overspending and overcapacity in the U.S. AI

industry, in the face of China's cheaper DeepSeek models, paused

Wall Street's bull rally in January. The tech-heavy Nasdaq

is now down about 9% from its record high hit in

December.

Further, Alibaba's U.S-listed shares rose 1.9%

after the release of a new reasoning model that the conglomerate

said was on par with global hit DeepSeek's R1.

On the trade front, President Donald Trump exempted

automakers that comply with existing free trade agreement and

sources said the negotiations were ongoing. However, Trump made

it clear that he was not calling off his trade war, citing the

need for more border controls.

Automakers such as General Motors ( GM ) and Ford were

down over 1.5% each after Wednesday's rise. Tesla fell

2.5% following a report that brokerage Baird named the electric

carmaker a 'bearish fresh pick'.

Against the backdrop of trade uncertainty, U.S. stocks have

witnessed increased volatility over the past few sessions.

"We're still continuing to see headline risks from the

development of tariffs on Mexico and Canada drive U.S. stock

prices and until we can get some clarity, we're going to expect

some volatility there," said Charlie Ripley, senior investment

strategist at Allianz Investment Management

Wall Street's main indexes closed higher over 1% on

Wednesday following Trump's announcement. However, the benchmark

S&P 500 is close to levels seen during Trump's election

victory and the Russell 200 index has fallen over 7%

since early November. Futures tracking the domestically focused

index fell 1.3% on Thursday.

Multiple reports have suggested that tariff uncertainty has

resulted in individuals holding back on consumption and

corporate executives staying put on investment decisions,

sparking concerns of an impending economic slowdown as inflation

stays elevated.

On Thursday, a report that showed weekly jobless claims

stood at 221,000 in the week before, lower than expectations of

235,000 allayed some worries about an economic slowdown.

Friday's key payrolls data will be crucial for investors trying

to gauge the economy's health.

Traders now see the Federal Reserve lowering borrowing costs

by 25 basis points for the first time this year in June,

according to data compiled by LSEG.

Comments from policymakers Patrick Harker, Raphael Bostic

and Governor Christopher Waller are due later in the day.

Zscaler ( ZS ) rose 3.3% after raising its fiscal 2025

revenue forecast, signaling increasing demand for its

cloud-based cybersecurity services.

Kroger ( KR ) fell 1.5% after its annual profit forecast

fell short of expectations.