Updates before markets open

By Shashwat Chauhan and Twesha Dikshit

Feb 18 (Reuters) - The main U.S. stock indexes were set to open higher on Wednesday, supported by gains in technology stocks as AI worries eased, while investors awaited minutes of the U.S. Federal Reserve's latest policy meeting for insight on the rate outlook.

Markets were volatile on Tuesday, with the S&P 500 .SPX ending 0.1% higher after falling as much as 0.9% early in the session. The Nasdaq .IXIC and the Dow .DJI saw similar reversals.

U.S. stocks have been rocked this month by worries that rapidly improving AI tools could disrupt business models, hitting sectors from software to trucking.

Broader AI-linked and megacap technology stocks also lost ground as investors demanded stronger evidence the heavy investments in the technology were tangibly boosting revenue and profits.

"We have not really seen much of a drawdown, just a lot of daily volatility, which implies that the market is more at a crossroads and waiting for some sort of a bullish or bearish catalyst to push... (it) in a new direction," said Sam Stovall, CFRA's chief investment strategist.

Most megacap and growth stocks rose in premarket trading on Wednesday. Nvidia NVDA.O was up 2.3% after the company said it had signed a multi-year deal to sell Meta Platforms META.O millions of its current and future AI chips.

Other megacaps also advanced. Amazon.com AMZN.O rose 1.4%, while Alphabet GOOGL.O and Microsoft MSFT.O edged up.

Minutes from the Fed's January policy meeting, where it held its main lending rate steady, are expected later in the day.

Traders are pricing in a chance of roughly 63% for a rate cut of at least 25 basis points at the Fed's June meeting, the first with odds above 50%, according to CME's FedWatch Tool.

The personal consumption expenditure report - the Fed's preferred inflation gauge - will be in focus later in the week and is expected to provide insights into inflation and how it could impact borrowing costs.

At 08:33 a.m. ET, Dow E-minis YMcv1 rose 122 points, or 0.25%, S&P 500 E-minis EScv1 were up 27.75 points, or 0.4%, and Nasdaq 100 E-minis NQcv1 gained 122.75 points, or 0.49%.

In earnings-driven moves, Analog Devices' ADI.O shares gained 5.6% after the chipmaker forecast second-quarter results above Wall Street estimates.

Global Payments GPN.N gained 11% after the company projected annual adjusted profit above expectations, while data analytics firm Verisk VRSK.O jumped 11.7% after beating fourth-quarter profit estimates.

Moderna MRNA.O climbed 7.8% after the U.S. Food and Drug Administration agreed to review its influenza vaccine, reversing an earlier decision to reject the application.

Palo Alto Networks PANW.O dropped 6.9% after the cybersecurity company trimmed its annual profit forecast, while Cadence Design Systems CDNS.O added 6.4% after the chip design software provider beat fourth-quarter revenue estimates.

The New York Times NYT.N rose 1.8% after Berkshire Hathaway disclosed a new investment in the media company.

Hard-disk drive maker Western Digital WDC.O plans to raise $3.17 billion by selling some of its stake in former unit Sandisk SNDK.O through a secondary share sale, sending Sandisk's shares down 3%.

(Reporting by Shashwat Chauhan and Twesha Dikshit in Bengaluru; Editing by Pooja Desai and Saumyadeb Chakrabarty)

((Shashwat.Chauhan@thomsonreuters.com;))