US STOCKS-Wall St set for steep fall at open as yuan slide deepens trade fears

* Apple set to drop for third session on tariff worries
* Trade-sensitive Boeing, Caterpillar and chip stocks slide
* Tyson Foods rises after profit beats estimates
* Volatility index at near 3-month high
* Futures drop: Dow 1.36%, S&P 1.45%, Nasdaq 1.99%

(Adds comment, details; Updates prices)
By Medha Singh
Aug 5 (Reuters) - U.S. stocks were set to open sharply lower
on Monday as China's yuan hit its lowest in more than a decade,
spurring a continuation of a sell-off on trade concerns on
Friday that generated the S&P 500's worst weekly performance of
2019.
China let the yuan breach the key 7-per-dollar level on
Monday, a sign Beijing might be willing to tolerate more
currency weakness that could further inflame the trade conflict
with the United States. "People are fearful that (the latest round of levies) is
going to make coming to an agreement on trade that much harder,"
said Robert Pavlik, chief investment strategist and senior
portfolio manager at SlateStone Wealth LLC in New York.
Wall Street's three main indexes fell sharply at the end of
last week after President Donald Trump upended a temporary trade
truce by threatening another round of tariffs on Chinese
imports.
The support that markets have seen since May from
expectations of an aggressive round of monetary easing has also
evaporated in the aftermath of the U.S. Federal Reserve's
statement last week.
At 8:29 a.m. ET, the S&P 500 and Dow e-minis EScv1
1YMcv1 fell by around 1.4%, while futures on the Nasdaq
NQcv1 , heavily exposed by its chipmakers and other global
technology players to Chinese markets, were down about 2%.
Shares of Apple Inc AAPL.O slid 2.8% in premarket trading
as analysts expected the newly proposed tariffs to hurt demand
for its flagship iPhone, while chipmakers Advanced Micro Devices
Inc AMD.O , Nvidia Corp NVDA.O , Micron Technology Inc MU.O
and Intel Corp INTC.O dropped between 2.1% and 4.2%.
Industrial bellwethers Boeing Co BA.N and Caterpillar Inc
CAT.N slipped 1.8% and 2.1%, respectively.
Signals from the bond market were also daunting as
investors' search for safer assets sent the U.S. 10-year
Treasury yields to fresh three-year lows following their biggest
weekly drop in seven years on Friday. US/
The CBOE Volatility index .VIX , a gauge of investor
anxiety, rose to its highest level in about three months at
21.48 points.
The rest of the high-flying FAANG group also lost ground,
with Facebook Inc FB.O , Amazon.com Inc AMZN.O , Netflix Inc
NFLX.O and Google-parent Alphabet Inc GOOGL.O down between
1.9% and 2.5%.
More than three quarters of S&P 500 companies have reported
results so far, with about 74% topping analysts' expectations
for profit, according to Refinitiv IBES data.
No.1 U.S. meat processor Tyson Foods Inc TSN.N rose 1.3%
after beating quarterly profit estimates.