US STOCKS-Wall St set for lower open as trade war worries weigh

By Johann M Cherian and Sukriti Gupta

March 4 (Reuters) - Wall Street's main indexes were set to extend recent losses on Tuesday, as investors stayed clear of riskier assets on expectations that President Donald Trump's tariffs on trade partners could intensify a growth-denting global trade war.

At 8:15 a.m. ET, Dow E-minis 1YMcv1 were down 161 points, or 0.37%, S&P 500 E-minis EScv1 were down 42 points, or 0.72% and Nasdaq 100 E-minis NQcv1 were down 175 points, or 0.85%.

The CBOE market volatility index .VIX edged up 1.48 points after hitting a two-month high at 24.31 in the previous session.

The benchmark S&P 500 .SPX logged its biggest one-day drop since mid-December and the Nasdaq .IXIC closed lower by about 9% from its all-time high on Monday after the U.S. imposed tariffs on imports from Mexico and Canada, and doubled duties on Chinese goods. A standoff between the countries could upend nearly $2.2 trillion in two-way annual trade.

China responded with additional tariffs on U.S. imports and Canada has vowed a response.

Ford F.N and General Motors GM.N, that have vast supply chains across north America, slipped about 1.3% each in premarket trading.

Heavyweight megacaps such as Nvidia NVDA.O, Microsoft MSFT.O and Meta META.O also lost between 1.6% and 3%.

Illumina ILMN.O fell 4% after China banned imports of genetic sequencers from the medical equipment maker, just minutes after Trump's tariff announcement.

U.S.-listed shares of Chinese companies Bilibili BILI.O and JD.com JD.O rose 3.5% and 2%, respectively, rebounding from Monday's losses.

"There are concerns that (tariffs are) going to put a lot of pressure on the economy and the markets overall," said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

"Sectors that will be hit the hardest would probably be the industrial sector because they're very cyclical, the small caps ... and then (the highly valued) tech stocks."

Investors are pricing in that the surcharges will fan inflation pressures, dampen demand and eat into corporate profits at a time when recent data has resurfaced expectations of a stalling economy. Futures tracking the domestically focused small-caps Russell 2000 index RTYcv1 fell 1%.

Morgan Stanley estimates that tariffs on imports from Mexico, Canada and China through 2026 could reduce earnings for the S&P 500 by 5% to 7%.

Executives are also holding back on investments and expenditures as they wait for more clarity on Trump's upcoming policies. Analysts say April 1 will be the date when the president is likely to announce his full-fledged global trade policy.

Interest rate futures point to the Federal Reserve delivering at least three 25 basis points interest rate cuts by December, up from about two on Monday, as traders bet on the likelihood that slowing growth could nudge the central bank to lower borrowing costs.

New York Fed President John Williams' comments later in the day will be parsed for the central bank's stance on monetary policy.

U.S. shares of bullion miners such as Sibanye Stillwater SBSW.N and Gold Fields GFI.N added about 2% each, tracking higher gold prices as markets flocked to the safe-haven asset. GOL/

Tesla TSLA.O fell 3.3% after data showed that the automaker's China-made electric vehicles sales fell 49.2% in February.

Target TGT.N lost 1.8% after the retailer forecast full-year comparable sales below estimates.