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Zoom Video up on upbeat forecast
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Lowe's gains on quarterly profit beat
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KeyCorp, Comerica fall on S&P downgrade
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Futures up: Dow 0.32%, S&P 0.57%, Nasdaq 0.78%
(Updated at 8:25 a.m. ET/ 1225 GMT)
By Amruta Khandekar and Shristi Achar A
Aug 22 (Reuters) - Wall Street was set to open higher on Tuesday as optimism around Nvidia's keenly awaited earnings report kept megacap growth stocks on a strong footing, while a pullback in yields on longer-dated government bonds also provided some support.
After sharp losses in the previous week on worries over higher-for-longer interest rates and a surge in Treasury yields, U.S. equities regained some ground on Monday due to a rally in Nvidia and other tech stocks ahead of the chip designer's second-quarter earnings on Wednesday.
Shares of Nvidia climbed 1.9% in premarket trading on Tuesday after adding nearly 9% in the previous session and closing about 2% short of their all-time high of $480.88.
Other big technology and growth stocks also rose, with Tesla advancing 4.0%.
Investors will be keen to see if Nvidia's results and forecast can match heightened market expectations following a blockbuster report last quarter that fueled a blistering rally in tech stocks amid the frenzy around artificial intelligence.
"What you could see potentially is earnings that are in line and guidance that is sort of in line or a little bit better than expected. The stock may sell off (a little), with people taking some profits," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield.
"If they really came out and said the demand for AI is less than expected, the entire market is going to be impacted."
On Tuesday, the yield on the 10-year Treasury note slipped from an over 15-year high hit earlier in the session, helping release some pressure off equities.
The recent selloff in bonds was driven by evidence of a strong U.S. economy, which dampened hopes of the Federal Reserve easing monetary policy anytime soon.
A meeting of central bankers at Jackson Hole, which starts on Thursday, will be closely monitored by investors for more clues on the direction for U.S. interest rates. Fed Chair Jerome Powell's speech at the meeting will grab the spotlight on Friday.
Traders' bets of a pause in rate hikes next month stand at 86.5%, while odds of a 25 basis point rate hike in November have risen to nearly 39% from about 35.8% a week ago, according to CME Group's FedWatch tool.
At 8:25 a.m. ET, Dow e-minis were up 111 points, or 0.32%, S&P 500 e-minis were up 25 points, or 0.57%, and Nasdaq 100 e-minis were up 116.25 points, or 0.78%.
Among other stocks, Lowe's Cos rose 2.8% after the home improvement retailer topped quarterly profit estimates.
Sports retailers Nike and Lululemon Athletica fell 1.6% and 0.9%, respectively, after a downbeat profit forecast from Dick's Sporting Goods.
Activision Blizzard gained 1.0% after Microsoft offered to sell the "Call of Duty" maker's non-European streaming rights to Ubisoft Entertainment to get the deal past British regulators.
U.S. regional lenders KeyCorp and Comerica slipped 1.0% and 0.8%, respectively, following an S&P downgrade.
(Reporting by Amruta Khandekar and Shristi Achar A; Editing by Shinjini Ganguli)
