Aug 20 (Reuters) - U.S. stock index futures dipped on Wednesday, following a tech-led selloff on Wall Street, as investors parsed earnings from retailers Target and Lowe's for clues on consumer spending ahead of a key Federal Reserve symposium later this week.
Earnings from major retailers, seen as a barometer for the health of the American consumer, are in the spotlight this week, at a time when sentiment has taken a hit from concerns that tariffs could drive prices higher in the coming months.
Target (TGT.N), plunged 10% in premarket trading after the company named a new CEO and retained its annual forecasts that were lowered in May due to weak demand for the largely discretionary merchandise it sells.
Estee Lauder (EL.N), fell 7.6% after the cosmetics giant forecast annual profit below estimates due to tariff-related headwinds, while Lowe's (LOW.N), gained 2.7% after the home improvement retailer raised its annual sales forecast and announced plans to buy Foundation Building Materials for nearly $8.8 billion.
The S&P 500 (.SPX), and the Nasdaq (.IXIC), marked their worst session in more than two weeks on Tuesday as investors started to take stock of elevated valuations in the tech sector, whose gains had driven most of the market recovery from the April selloff.
Deepening concerns of government interference with companies, sources said the Trump administration was looking into taking equity stakes in chip companies in exchange for grants under the CHIPS Act - just weeks after signing unprecedented revenue-sharing deals with Nvidia and AMD.
Nvidia (NVDA.O), Advanced Micro Devices (AMD.O), and Intel (INTC.O), were marginally lower in premarket trading. Nvidia is expected to report quarterly results on Aug. 27.
"For now, this looks like a mild and possibly necessary correction after an extremely strong run for this space," said AJ Bell's head of financial analysis, Danni Hewson.
"Nvidia's quarterly earning next week now look even more crucial than they already were."
At 07:22 a.m. ET, Dow E-minis were down 47 points, or 0.10%, S&P 500 E-minis were down 6.75 points, or 0.10%, and Nasdaq 100 E-minis were down 37.5 points, or 0.16%.
Minutes from the Fed's July meeting, where interest rates were left unchanged, are expected at 2:00 p.m. ET. It could set the tone before the central bank's highly anticipated conference in Jackson Hole, Wyoming, between August 21 and 23.
Chair Jerome Powell is expected to speak on Friday and his remarks will be scrutinized for any clues on monetary policy, even as investors price in a 25-basis-point interest rate cut in September, according to data compiled by LSEG.
Traders "remain wary that Powell could strike a more hawkish tone, emphasizing tariff-driven inflation risks and pushing back against the degree of easing expected by the market," said Bas Kooijman, CEO of DHF Capital S.A.
Remarks from Governor Christopher Waller and Atlanta Fed President Raphael Bostic are expected later in the day.
Recent economic data has suggested that the economy is yet to feel the full impact of tariffs and strategists expect the lingering uncertainty to temper market optimism, leaving the benchmark S&P 500 to potentially end the year just below current near-record levels.
On the trade front, the Commerce Department slapped 50% import levies on more than 400 "derivative" steel and aluminum products.
Reporting by Johann M Cherian and Sanchayaita Roy in Bengaluru; Editing by Devika Syamnath
