US STOCKS-Wall St on track for muted open ahead of Fed commentary

By Shashwat Chauhan and Kanchana Chakravarty

May 20 (Reuters) - Wall Street's main indexes were set for a subdued open on Tuesday as investors awaited commentary from Federal Reserve officials through the day to assess the potential impact of U.S. President Donald Trump's tariffs in the second half of 2025.

At least seven Fed officials including St. Louis Fed President Alberto Musalem are expected to speak later in the day.

Traders currently expect at least two 25-basis-point rate cuts from the U.S. Federal Reserve by the end of the year, with the first expected in September, according to data compiled by LSEG.

Fed officials on Monday flagged the ramifications of the latest downgrade of the U.S. government's sovereign credit rating and uneasy market conditions.

"The Fed is trying to not have (tariffs) influence what they do and they've said so," said Thomas Martin, senior portfolio manager at Globalt Investments.

"They certainly don't want to raise (interest rates), and so standing pat is a pretty good thing to do."

At 08:26 a.m. ET, Dow E-minis YMcv1 were down 5 points, or 0.01%, S&P 500 E-minis EScv1 were down 13.25 points, or 0.22%, and Nasdaq 100 E-minis NQcv1 were down 74.25 points, or 0.34%.

Among top premarket movers, retailer Home Depot HD.N gained 2.3% after beating Wall Street estimates for first-quarter sales.

Amer Sports AS.N jumped 10.2% after raising its 2025 revenue forecast.

UnitedHealth UNH.N continued its recovery after hitting its lowest level since April 2020 last week and rose 2.7%.

Most megacap and growth stocks were tracking lower, with Nvidia NVDA.O and Amazon.com AMZN.O down about 0.4% each.

Stocks initially fell on Monday and government bond yields jumped as investors assessed the implications of Moody's downgrading the U.S. sovereign credit rating to "Aa1" from a pristine "Aaa", citing the government's $36-trillion outstanding debt and interest.

Long-dated Treasury yields held steady on Tuesday, with those on the 10-year Treasury note US10YT=RR last at 4.48%.

Concerns around mounting U.S. debt remained in focus, with a vote on Trump's sweeping tax-cut bill in the House of Representatives expected sometime this week.

U.S. stocks have had a solid month so far, with the S&P 500 now more than 17% higher than its April lows, when global markets were jolted by Trump's reciprocal tariffs on most trading partners.

A pause in the tariffs, a temporary trade truce between the U.S. and China and some tame inflation data have pushed equities higher, although the S&P 500 is still about 3% away from its record highs.

Preliminary readings of the May Purchasing Managers Index are due later in the week.

AI-darling Nvidia NVDA.O is scheduled to report quarterly earnings on May 28.