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* Cisco gains on quarterly results beat

* Initial weekly jobless claims drop more than expected

* Futures up: Dow 0.11%, S&P 0.36%, Nasdaq 0.49%

Aug 17 (Reuters) - The S&P 500 and Nasdaq were set to open higher on Thursday after upbeat results from Cisco, while investors assessed minutes of the U.S. Federal Reserve's last policy meeting which showed most officials held a hawkish view on interest rates.

Cisco Systems gained 2.2% in premarket trading after the networking equipment maker's fourth-quarter results beat estimates, and its CEO talked up artificial intelligence opportunities.

Wall Street's main indexes had closed lower on Wednesday after the Fed minutes fueled worries the central bank could tighten monetary policy further, especially after recent data on retail sales and industrial production highlighted resilience in the U.S. economy.

Minutes of the Fed July 25-26 meeting showed most policymakers continued to prioritize the battle against inflation, while few participants cited risks to the economy if rates were pushed too high.

"There's reason to continue to have another interest rate increase from here and then holding that longer than the market expects to," said Thomas Martin, senior portfolio manager at Globalt Investments. Traders' bets of a rate hike pause from the Fed in September slipped to 86.5% from about 89% a week earlier, according to CME Group's Fedwatch tool. Underscoring strength in the labor market and diminishing hopes for a pause in policy tightening, initial weekly jobless claims fell to 239,000 in the previous week, compared with expectations of 240,000.

The yield on 10-year Treasury notes hit a fresh 10-month high on Thursday while that on the two-year Treasury note, which best reflects short-term rate expectations, edged lower to 4.94%.

Nvidia rose 0.9%. Its shares have rallied this week with analysts raising price targets ahead of the chip designer's quarterly results later this month, with Oppenheimer and Rosenblatt Securities being the latest to hike their PT on Thursday.

Walmart raised its full-year forecasts and beat estimates for second-quarter sales, suggesting consumer demand in the U.S. remained strong, but its shares were down 0.9% after rising up as much as 3%.

Walmart results follow stronger-than-expected earnings from Target and Home Depot earlier this week, marking an upbeat second quarter for major U.S. retailers.

CVS Health Corp fell 8.1% on news that Blue Shield of California plans to drop the company as its pharmacy benefit manager and work with Amazon whose shares rose 1%.

Major health insurers UnitedHealth and Cigna fell 3.3% and 5.8%, respectively.

At 8:37 a.m. ET, Dow e-minis were up 37 points, or 0.11%, S&P 500 e-minis were up 16 points, or 0.36%, and Nasdaq 100 e-minis were up 72.5 points, or 0.49%.

Shares of Ball Corp climbed 3.9% after Britain's BAE Systems agreed to buy the beer can supplier's aerospace assets for about $5.55 billion. (Reporting by Amruta Khandekar and Shristi Achar A in Bengaluru Editing by Vinay Dwivedi)