US STOCKS-Wall St cuts losses as investors assess Powell's comments

By Johann M Cherian and Sukriti Gupta

March 7 (Reuters) - Wall Street's main indexes traded off session lows on Friday as investors assessed comments from Fed Chair Jerome Powell amid economic uncertainty fanned by the Trump administration's tariff policies.

Powell said the Federal Reserve will take a cautious approach to monetary policy easing, adding that the economy currently "continues to be in a good place".

"But they (the Fed) may not be able to do anything in terms of lowering rates because while the economy is slowing, inflation is a problem," said Oliver Pursche, senior vice president at Wealthspire Advisors.

At 01:00 p.m. ET the Dow Jones Industrial Average .DJI fell 71.45 points, or 0.17%, to 42,507.63, the S&P 500 .SPX lost 21.91 points, or 0.38%, to 5,716.61 and the Nasdaq Composite .IXIC lost 104.92 points, or 0.58%, to 17,961.85.

Cyclical sectors such as consumer discretionary .SPLRCD fell 1.8%, while banks such as Wells Fargo WFC.N and Goldman Sachs GS.N declined, pushing the broader banks index .SPXBK down 1.9%.

Most megacaps also dropped. Meta META.O and Amazon.com AMZN.O fell more than 3% each.

Earlier in the day, a Labor Department report showed job growth picked up in February from the previous month. However, unemployment ticked up to 4.1%, adding to worries about the economy's resilience.

Following the data, traders revised their expectations of the first interest rate cut this year to June from May, according to data compiled by LSEG.

Adding to the dour sentiment, brokerages Morgan Stanley and Goldman Sachs lowered their growth forecasts for the economy.

Equities witnessed their most volatile week this year, with Wall Street's fear gauge .VIX trading near levels not seen since mid-December, as traders tried to assess President Donald Trump's fluctuating trade policy.

In the previous session, the Nasdaq confirmed a 10% drop from its December all-time high, while the benchmark S&P 500 .SPX appeared to have reversed most of its gains since Trump's election victory.

The indexes, along with the blue-chip Dow .DJI, are on track for their biggest weekly drop since September. Equity funds witnessed the largest weekly outflow in four weeks in the week ended on March 5.

Trump on Thursday offered a four-week reprieve on tariffs he imposed on imports from Canada and Mexico that fall under a free-trade pact, but the U.S. is still in a trade war with China. Additionally, reciprocal trade barriers and other duties are expected to take effect in the following weeks.

Hewlett Packard Enterprise HPE.N slumped 15.8% after saying its annual profit forecast would be hit by U.S. tariffs.

Costco COST.O fell 7% after the retailer missed Street estimates on quarterly earnings as merchandise costs increased.

Broadcom AVGO.O, on the other hand, rose 5.5% after the chipmaker assuaged investor worries about artificial intelligence infrastructure demand with a strong second-quarter forecast.

Declining issues outnumbered advancers for a 1.18-to-1 ratio on the NYSE and a 1.36-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and 13 new lows, while the Nasdaq Composite recorded 18 new highs and 140 new lows.