Wall Street futures ease slightly, indexes set for weekly gains

(Reuters) -Wall Street futures were subdued on Friday after the three main U.S. indexes hit record highs in the previous session, packing up a week of economic data that did not temper expectations of interest rate cuts from the Federal Reserve.

Wall Street on Thursday was boosted by a rally in shares of Tesla and Micron Technology, while a monthly inflation report kept the U.S. central bank on track to cut rates next week.

Markets were already pricing in a 25 basis point easing in monetary policy after a series of recent indicators had shown that the labor market was worse than previously thought.

The bleak August nonfarm payrolls, however, brought up bets on a bigger 50-bps cut, that currently stand at 7.5%, CME’s FedWatch tool showed.

Post the inflation data, pricing showed three quarter-point cuts, one at every Fed meeting left this year.

A preliminary reading of the University of Michigan’s consumer sentiment survey is due on Friday.

At 5:27 a.m. ET, Dow E-minis were down 76 points, or 0.16%, S&P 500 E-minis were lower 8.5 points, or 0.13% and Nasdaq 100 E-minis were down 14 points, or 0.06%.

The three main indexes are set to log gains for the second week of September, largely helped by a revival in artificial intelligence trade after cloud computing giant Oracle’s upbeat forecast on Tuesday.

It sparked a rally in AI-linked semiconductors and utilities companies powering data centers earlier in the week, setting up the S&P 500 information technology sector to outperform peers this week.

The indexes are in the positive territory for September so far – a month that is deemed bad for U.S. equities historically, where the benchmark S&P 500 has shed 1.5% on average since 2000, data compiled by LSEG showed.

Among stocks, Warner Bros Discovery was 4% higher in premarket trading, extending Wednesday’s over 28% gains, as a source said Paramount Skydance was preparing a bid for the Hollywood studio.

Photoshop-maker Adobe gained 4.2% after raising its annual profit and revenue forecasts.

Microsoft inched up 1.6% after it reached a non-binding deal with OpenAI to allow it to restructure itself into a for-profit company.

(Reporting by Purvi Agarwal in Bengaluru; Editing by Maju Samuel)