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By Johann M Cherian and Sukriti Gupta

March 6 (Reuters) - Wall Street's main indexes fell on Thursday, led by a decline in chip stocks as Marvell's forecast fanned worries of slowing demand for AI infrastructure, while worries about a trade war unleashed by U.S. tariffs also weighed on sentiment.

Marvell MRVL.O fell 18.5% after the chipmaker forecast first-quarter sales in line with analysts' average estimate, which failed to excite investors who had expected stronger AI-driven growth.

Peers Broadcom AVGO.O and Nvidia NVDA.O also fell, pulling the broader chip index <.SOX> down over 3%. The broader S&P 500 technology sector .SPLRCT lost 1.7%.

Megacaps such as Microsoft MSFT.O and Meta META.O declined about 0.9% each.

Concerns about overspending and overcapacity in the U.S. AI industry, in the face of China's cheaper DeepSeek models, paused Wall Street's bull rally in January. The tech-heavy Nasdaq .IXIC is now down over 9% from its record high hit in December.

At 9:53 a.m. ET, the Dow Jones Industrial Average .DJI fell 478.37 points, or 1.11%, to 42,528.22, the S&P 500 .SPX lost 75.21 points, or 1.29%, to 5,767.42 and the Nasdaq Composite .IXIC lost 279.63 points, or 1.51%, to 18,273.10.

Financials .SPSY fell 1.6%, with big banks such as Goldman Sachs GS.N and Morgan Stanley MS.N down over 2.3% each.

On the trade front, President Donald Trump exempted automakers that comply with existing free trade agreement and sources said the negotiations were ongoing. However, Trump made it clear that he was not calling off his trade war.

Automakers such as General Motors GM.N and Ford F.N were down 3.4% and 1.8%, respectively. Tesla TSLA.O fell 3.9% following a report that brokerage Baird named the electric carmaker a 'bearish fresh pick'.

Against the backdrop of trade uncertainty, U.S. stocks have witnessed increased volatility over the past few sessions.

"We're still continuing to see headline risks from the development of tariffs... and until we can get some clarity, we're going to expect some volatility," said Charlie Ripley, senior investment strategist at Allianz Investment Management.

The benchmark S&P 500 .SPX is close to levels seen during Trump's election victory and the Russell 200 index .RUT has fallen over 8% since early November. The domestically focused index fell 1.3% on Thursday.

Multiple reports have suggested that tariff uncertainty has resulted in individuals holding back on consumption and corporate executives staying put on investment decisions, sparking concerns of an impending economic slowdown as inflation stays elevated.

Ripley added that company forecasts were coming in lighter than expected probably because of the uncertain path ahead.

On the data front, the number of Americans filing new applications for unemployment benefits fell more than expected last week. Friday's key payrolls data will be crucial for investors trying to gauge the economy's health.

Traders now see the Federal Reserve lowering borrowing costs by 25 basis points for the first time this year in June, according to data compiled by LSEG.

Comments from policymakers Patrick Harker and Raphael Bostic and Governor Christopher Waller are due later in the day.

Kroger KR.N rose 4.6% after forecasting annual same-store sales largely above estimates.

Declining issues outnumbered advancers by a 3.34-to-1 ratio on the NYSE and by a 2.89-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week highs and three new lows, while the Nasdaq Composite recorded 18 new highs and 73 new lows.

(Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru; Editing by Maju Samuel)

((johann.mcherian@thomsonreuters.com;))