Wall St set for mixed open in cautious start to Fed meeting week
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Apple falls after analyst flags weak demand for new iPhones
Intel rises after report chipmaker qualifies for federal grants
Alcoa up after announcing stake sale in Ma’aden joint venture
Futures: Dow up 0.25%, S&P 500 down 0.08%, Nasdaq down 0.45%
Updated at 08:30 a.m. ET/ 1230 GMT
By Johann M Cherian and Purvi Agarwal
Sept 16 (Reuters) - The main U.S. stock indexes were set for a mixed open onMonday as caution set in on Wall Street aheadof the Federal Reserve's pivotalmonetary policy decision, due later in the week, with a majority of traders pricing ina steep cut inborrowing costs.
Following a diverse batch of economic data and comments from a former policymaker in the last few weeks, traders swayed in their bets on what decision the central bank would arrive at during its Sept. 17 to 18 meeting.
Odds for a 50-basis-point cut are at 65% from 30% a week ago, according to the CME FedWatch Tool, which showed a 35% probability for a 25-basis-point reduction. There is concern an outsized move could mean the Fed sees the economy cooling at a faster-than-anticipated pace.
"Influential investors have been talking about the need for a 50-basis-point cut and we're seeing increased talk of recession risks. As a result, there's betting that we will get something other than the 25-bps cut," said Sam Stovall, chief investment strategist at CFRA Research.
"It would be a good thing for the Fed to imply that they are ahead of the curve."
Markets have been in abull run since the start of this year on expectations theworld's most influential central bank would kickoff its monetary policy easing cycle soon. The S&P 500 .SPX and the Dow .DJI are currentlynear record highs.
The benchmark index and the tech-heavy Nasdaq .IXIC notched their biggest weekly jumps in about 11 months on Friday, although analysts attributed the optimism to signs of a robust economy rather than rate-cut expectations.
At 08:30 a.m., Dow E-minis 1YMcv1 were up 102 points, or 0.25%, S&P 500 E-minis EScv1 were down 4.5 points, or 0.08% and Nasdaq 100 E-minis NQcv1 were down 88.75 points, or 0.45%.
Futures tracking small caps RTYc1, which tend to do well with lower borrowing costs, outperformed with a 0.42%rise. The Russell 2000 index .RUT has gained over 7% so far this year and hit its highest level in over a week on Friday.
In economicdata, retail sales, weekly jobless claims, housing starts and industrial production are due through the week.
Among rate-sensitive growth stocks, Nvidia NVDA.O slipped 1.7%, while Microsoft MSFT.Oand Tesla TSLA.O dipped 0.20% each inpremarket trading.
Most semiconductor stocks also traded lower, with Micron Technology MU.O down 3% after hitting a near-two week high on Friday. Broadcom AVGO.O and Qualcomm QCOM.O was each off more than 1.3%.
Apple AAPL.O slipped 2.5% after an analyst at TF International Securities said demand for its latest iPhone 16 models was lower than expected.
Intel Corp INTC.O climbed 1.3% after a report showed the chipmaker has officially qualified for as much as $3.5 billion in federal grants to make semiconductors for the U.S. Department of Defense.
Crypto stocks trended lower, with MicroStrategy MSTR.O and Coinbase <COIN.O> slipping more than 2% each asbitcoin prices BTC= fell.
Alcoa AA.N gained 1.6%after the aluminum maker said on Sunday it would sell a 25.1% stake in its joint venture with Saudi Arabia's Ma'aden for $1.1 billion.
U.S.-listed shares of Bausch + Lomb BLCO.N jumped 20% after a report said the eye care firm was exploring a sale.
US rates have risen but unemployment has stayed low https://reut.rs/3zh65D1
Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Pooja Desai
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