* Micron falls on lowered revenue forecast
* Semiconductor stocks drop for third session
* Novavax falls 30% after cutting revenue view by half
* Indexes: Dow slips 0.4%, S&P off 0.7%, Nasdaq down 1.5% (Updates Novavax stock price)
By Herbert Lash and Bansari Mayur Kamdar
Aug 9 (Reuters) - The Nasdaq fell on Tuesday after a dismal forecast from Micron Technology pulled chip and technology stocks lower as markets await U.S. inflation data that could lead the Federal Reserve to further tighten its aggressive plans to curb inflation.
High inflation numbers on Wednesday, following last week's blowout jobs report, would likely stop the Fed from easing interest rates hikes and halt a nascent recovery in stocks.
Traders see a 68.5% chance of the Fed raising rates by 75 basis points in September, in what would be its third big hike in a row.
Adding to concerns of a tight labor market and runaway inflation, data on Tuesday showed an acceleration of unit labor costs in the second quarter, which suggested strong wage pressures will help keep inflation elevated.
Unit labor costs - the price of labor per single unit of output - rose at a 10.8% rate, following a 12.7% rate of growth in the first quarter, the Labor Department said.
"We're still seeing wage pressure building, using last Friday's job data as a gauge," said Jimmy Chang, chief investment officer at Rockefeller Global Family Office.
While Chang remains cautious about the market's outlook, he said: "I don't think it's going to be a set of numbers that will change the Fed’s policy course."
The Dow Jones Industrial Average fell 65.41 points, or 0.2%, to 32,767.13, while the S&P 500 lost 19.78 points, or 0.48%, to 4,120.28 and the Nasdaq Composite dropped 154.45 points, or 1.22%, to 12,490.01.
Seven of the 11 major S&P 500 sectors fell, with consumer discretionary, information technology and communication services down between 0.8% and 1.6%.
Micron Technology slid 3.7% after the memory-chipmaker cut its fourth-quarter revenue forecast and warned of negative free cash flow the following quarter as demand ebbs for chips used in personal computers and smartphones.
Micron's warning, a day after Nvidia Corp forecast weakness in its gaming business, knocked the Philadelphia Semiconductor index 4.39% lower, with all 30 components down. The index has fallen almost 8% the past three days.
"It does add to a general growing realization that the move the market experienced in July was probably more of a counter-trend rally in a deteriorating economic situation for both companies (Micron and Nvidia)," said Robert Stimpson, chief investment officer at Oak Associates Funds.
President Joe Biden signed a sweeping bill to provide $52.7 billion in subsidies for U.S. semiconductor production and research, a measure that gained bipartisan support to combat China's investment in technology.
"It's utterly discounted," said Michael Shaoul, chief executive officer at Marketfield, on why chip stocks were unfazed by the bill.
Rate-sensitive growth and technology stocks slipped as U.S. Treasury yields climbed, with megacaps such as Amazon.com and Tesla down more than 1% each.
Despite a choppy recovery since mid-June, the benchmark index is down 13.5% this year after hitting a record high in early January as surging consumer prices, hawkish central banks and geopolitical tensions weigh.
Stronger-than-expected earnings from corporate America have been a positive, with 77.5% of S&P 500 companies beating earnings estimates, according to Refinitiv data as of Friday.
Occidental Petroleum rose 3.5% to $62.14 after Warren Buffett's Berkshire Hathaway increased its stake to 20.2% of outstanding shares. Occidental's shares have more than doubled in price this year.
U.S. vaccine maker Novavax slumped 30.7% after it halved its annual revenue forecast as it does not expect further sales of its COVID-19 shot this year in the United States amid a global supply glut and soft demand.
Declining issues outnumbered advancing ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 2.64-to-1 ratio favored decliners.
The S&P 500 posted four new 52-week highs and 30 new lows; the Nasdaq Composite recorded 41 new highs and 62 new lows.
(Reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in Bengaluru; Editing by Saumyadeb Chakrabarty, Arun Koyyur and Shounak Dasgupta; Editing by Lisa Shumaker)