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* Applied Materials falls as supply chain snarls cloud outlook

* Ross Stores plunges after cutting 2022 forecast

* Futures up: Dow 0.87%, S&P 1.12%, Nasdaq 1.50% (Adds comment, details; updates prices)

By Amruta Khandekar and Devik Jain

May 20 (Reuters) - U.S. stock indexes were set for a higher open on Friday, with banks and megacap growth shares rising on the last day of a week that saw heightened volatility on concerns about the impact of higher inflation and subsequent rate hikes to tame it.

Google owner-Alphabet Inc, Apple Inc, Meta Platforms, Microsoft Corp, Amazon.com and Tesla Inc gained between 1.3% and 1.7% in premarket trading.

Citigroup added 1% to lead gains among the big banks.

Asian and European shares rebounded on Friday after China cut a key lending benchmark to support its economy.

"It seems as if the rebound was triggered by China. The real question is whether this will last by the end of the trading day," Sam Stovall, chief investment strategist at CFRA Research, said.

"It's definitely going to be a traders' battle today. The market is trying to orchestrate at least a near-term relief rally which is normal within bear market trends."

All the major indexes ended lower on Thursday, posting their second consecutive session of losses, dragged down by shares of Apple and network gear maker Cisco Systems.

Disappointing forecasts from retailers including Walmart Inc and Target Inc have rattled market sentiment this week, adding to evidence that rising prices have started hurting the purchasing power of U.S. consumers.

The S&P 500 and the Nasdaq are tracking their seventh straight week of losses, their longest losing streak since 2001, while the Dow is set for its eight consecutive weekly decline, its longest since 1932.

The indexes are down between 14.0% and 27.2% so far this year as investors adjust to prolonged supply chain snarls, COVID-19 lockdowns in China, geopolitical uncertainty stemming from the Ukraine conflict and the U.S. Federal Reserve raising rates.

Traders are pricing in 50 basis point interest rate hikes by the U.S. central bank in June and July.

The benchmark index is down about 18.7% from its record close on Jan. 3. A close of 20% or more below that level will confirm the S&P 500 has been in a bear market since hitting that peak.

At 08:22 a.m. ET, Dow e-minis were up 271 points, or 0.87%, S&P 500 e-minis were up 43.75 points, or 1.12%, and Nasdaq 100 e-minis were up 177.75 points, or 1.5%.

Among other stocks, Ross Stores plunged 23.7% after the discount apparel retailer cut its 2022 forecasts for sales and profit.

Applied Materials Inc slipped 0.6% after the semiconductor equipment maker gave a downbeat third-quarter outlook, signaling a hit from supply chain challenges. (Reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)