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* U.S. yield curve inversion hits risk appetite
* Coty jumps after raising FY revenue forecast
* Autodesk drops after FY earnings forecast cut
* Futures down: Dow 0.17%, S&P 0.13%, Nasdaq 0.22% (Adds comments, details; Updates prices)
By Akanksha Rana
Aug 28 (Reuters) - Wall Street was set to open lower on Wednesday after moves in the U.S. bond market returned investors to worrying about the risk of a recession as a bruising U.S.-China trade war drags on.
A key part of the U.S. yield curve, closely watched for signals on economic downturn, inverted to levels not seen since 2007 on Tuesday, triggering a selloff on Wall Street.
While the inversion continued to deepen, the yield on the 30-year government bonds hovered above its record low set earlier in the session.
Bank shares were the worst hit on expectations of lower interest rates. Bank of America Corp, Citigroup Inc , Goldman Sachs Group Inc and JPMorgan Chase & Co were down about 1% in premarket trading.
"Each time (the yield curve) inverts, people get a little uncomfortable," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"But for it to be a true sign of an impending recession, it has to invert and stay inverted. We have not seen that yet."
The recent bout of selling has dragged the benchmark S&P 500 5.5% away from a record high hit in late July.
Markets have been roiled by the trade war, which was fueled further after Beijing announced retaliatory tariffs on U.S. goods last week.
Investors are also awaiting the monthly jobs report and manufacturing data next week to gauge the pace of interest rate cuts.
At 8:57 a.m. ET, Dow e-minis were down 43 points, or 0.17%. S&P 500 e-minis were down 3.75 points, or 0.13% and Nasdaq 100 e-minis were down 16.5 points, or 0.22%.
Among other stocks, Coty Inc surged 4.9% after the cosmetics maker raised its full-year revenue forecast, betting on a four-year restructuring plan that involves a multi-billion dollar write-down of some of its beauty brands and a simpler organizational structure.
Shares of Hewlett Packard Enterprise Co jumped 3.6% after the company beat profit estimates and raised its 2019 adjusted earnings forecast.
Autodesk Inc's slumped 11.8% after the AutoCAD software maker cut its full-year earnings forecast. (Reporting by Akanksha Rana in Bengaluru; Editing by Anil D'Silva)