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Tesla up after report on six-seat Model Y plans

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Boeing ( BA ) drops after brokerage rating downgrade

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August ISM manufacturing data due at 10 a.m. ET

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Futures off: Dow 0.50%, S&P 500 0.49%, Nasdaq 0.62%

(Updated at 08:36 a.m. ET/1236 GMT)

By Johann M Cherian

Sept 3 (Reuters) - Wall Street was set for a lower open

on Tuesday as investors moved to the sidelines ahead of a slew

of economic data reports due through the week that could

influence the extent of monetary policy easing by the Federal

Reserve this year.

The blue-chip Dow and the benchmark S&P 500

recovered from early August's losses and ended higher on Friday,

notching their fourth straight month of gains, after data

pointed to a robust U.S. economy and moderating price pressures.

The Dow is at a record high and the S&P 500 is within 1% of

its own milestone as markets enter into what has been a

historically weak month for the main indexes on average.

Traders continue to scour for reassuring signs about the

economy, with the release of the monthly ISM manufacturing

survey due at 10 a.m. ET. Economists forecast the manufacturing

index to rise to 47.5, but remain in contractionary territory.

A number of labor market reports will be parsed through the

week, ahead of Friday's non-farm payrolls data for August. The

jobs market has come under greater scrutiny, after July's report

hinted at a greater-than-expected slowdown, that consequently

sparked a global selloff in riskier assets.

The U.S. central bank's meeting later in the month will be

closely observed, following Chair Jerome Powell's recent support

for forthcoming policy adjustment.

Odds of a 25-basis point interest rate cut are at 67%,

according to the CME Group's FedWatch Tool, while those for a

bigger 50 bps reduction are at 33%.

"It's just speculation about the Fed. If there is any kind

of economic weakness, investors believe the Fed will respond by

lowering interest rates more aggressively," Sam Stovall, chief

investment strategist at CFRA Research, said.

At 08:36 a.m. ET, Dow E-minis were down 208 points,

or 0.50%, S&P 500 E-minis were down 27.75 points, or

0.49%, Nasdaq 100 E-minis were down 121.25 points, or

0.62%.

Rate-sensitive chip stocks led premarket declines, with

Nvidia ( NVDA ) down 2%, Broadcom ( AVGO ) dropping 1.2% and

Advanced Micro Devices ( AMD ) losing 1.1%, after the

Philadelphia SE Semiconductor index's 2.6% jump on

Friday.

"With the market having been pretty strong over August, some

investors are starting the month taking some profits," said Sam

Stovall, chief investment strategist at CFRA Research.

Tesla added 1.1% after a report said it plans to

produce a six-seat variant of its Model Y car in China from late

2025. Separately, the automaker's sales in China logged their

best month for the year so far in August.

Boeing ( BA ) lost 3.7% after Wells Fargo downgraded the

planemaker to "underweight" from "equal weight", while Unity

Software ( U ) jumped 7% after Morgan Stanley upgraded the

software firm to "overweight" from "equal-weight".

U.S. Steel dropped 4.4% after Democratic presidential

candidate Kamala Harris expressed her concern about the steel

firm being acquired by Japan's Nippon Steel ( NISTF ).

Southwest Airlines ( LUV ) rose 2.3% following a report that

Elliott Investment now holds 10% of the company's shares,

allowing the hedge fund to call a special meeting at the

carrier.