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* Target Corp sinks as Q1 profit halves
* Futures down: Dow 0.47%, S&P 0.65%, Nasdaq 0.95% (Adds comment, details; updates prices)
By Amruta Khandekar
May 18 (Reuters) - Wall Street's main indexes were set for a lower open on Wednesday following a sharp rally in megacap growth stocks in the previous session that fizzled out on fears of aggressive monetary policy tightening and slowing economic growth.
Rate-sensitive Big Tech and growth companies such as Microsoft Corp, Apple Inc, Google owner-Alphabet Inc, Meta Platforms, Tesla Inc and Amazon.com fell between 0.6% and 2.3% in premarket trading.
The S&P 500 and the Nasdaq closed more than 2% higher in the previous session after strong April retail sales eased worries about slowing economic growth.
Tuesday's rally followed weeks of selling on the U.S. stock market that last week saw the S&P 500 coming close to confirming a bear market from its record close on Jan. 3.
Yield on the benchmark U.S. 10-year Treasury hit 3%, its highest in a week.
Federal Reserve Chair Jerome Powell told the Wall Street Journal on Tuesday that the U.S central bank will keep "pushing" on rate hikes until it sees inflation move down in a "clear and convincing way", not hesitating to move more aggressively if that does not happen.
Traders are pricing in 50 basis point interest rate hikes by the Fed in June and July.
"Markets don't like uncertainty and at this point it's unclear how far the Fed will have to go to curb inflation. Until we have clarity, the markets are going to continue to be volatile," Brooke May, managing partner at Evans May Wealth in Indianapolis, said.
"Higher rates will eat into retail spending, in addition to corporate profits and the market is just trying to digest that."
Target Corp's first-quarter profit halved and the retailer warned of a bigger margin hit due to rising fuel and freight costs, sending its shares sliding 24.1%.
Shares of other retailers such as Gap Inc, Kohl's Corp, Nordstrom Inc, Costco, Best Buy , Macy's Inc and Dollar General Corp dropped between 4.1% and 6.4%.
Uncertainty about Fed policy moves has weighed on the markets recently, that is already reeling from concerns about a global economic slowdown due to the conflict in Ukraine, soaring inflation, prolonged supply chain snarls and pandemic-related lockdowns in China.
The S&P 500 is down 14.2% so far in 2022 and the Nasdaq has fallen more than 23%, hit by growth stocks.
At 8:27 a.m. ET, Dow e-minis were down 154 points, or 0.47%, S&P 500 e-minis were down 26.5 points, or 0.65%, and Nasdaq 100 e-minis were down 119 points, or 0.95%.
Lowe's Cos Inc fell 3.8% after reporting a bigger-than-expected drop in same-store sales, as demand eased for its home-improvement tools and building materials from pandemic highs. (Reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)