US STOCKS-Dow set to open at record high on rate-cut hopes, UnitedHealth gains

By Johann M Cherian and Sanchayaita Roy

Aug 15 (Reuters) - The blue-chip Dow was on track to open at a record high on Friday, underpinned by expectations of an interest rate cut in September and gains in UnitedHealth's shares after Berkshire Hathaway raised its stake in the health insurer.

Futures tracking the tech-heavy Nasdaq were slightly off as chip stocks weakened after Applied Materials AMAT.O warned of weak China demand.

UnitedHealth Group UNH.N jumped 11.5% in premarket trading after Warren Buffett's company BRKa.N revealed a new investment in the health insurer, while a securities filing showed Michael Burry's Scion Asset Management included bullish positions in the company.

Rising costs in the broader healthcare sector and an about 46% slump in heavyweight UnitedHealth's shares this year have left the Dow .DJI lagging its Wall Street peers on the road to record highs. The price-weighted index last scaled an all-time high on December 4.

This week, however, the healthcare sector .SPXHC is the top performer on the benchmark S&P 500 and is on track for its best weekly performance in three.

Other insurers also gained, with Elevance ELV.N up 4.2%, Centene CNC.N rising 2.9% and Molina MOH.N adding 3.7% before the bell on Friday.

More broadly, the main U.S. stock indexes are on track for their second week of gains, buoyed by expectations that the Fed could restart its monetary policy easing cycle with a 25-basis-point interest rate cut in September.

The central bank last lowered borrowing costs in December and said U.S. tariffs could add to price pressures. However, recent labor market weakness and signs that tariff-induced inflation was yet to reflect in headline consumer prices have made investors confident of a potential dovish move next month.

"A 25bps rate cut is still almost fully priced in although it has put a dampener on tentative expectations that the Fed could deliver an even larger 50bps rate cut like last September," analysts at MUFG said in a note.

"Market participants are still confident that the Fed will resume rate cuts in response to weakness in the labor market and the lack of pass through so far to consumer prices from higher tariffs as evident in this week's CPI report."

At 07:16 a.m. ET, Dow E-minis YMcv1 were up 303 points, or 0.67%, S&P 500 E-minis EScv1 were up 9.25 points, or 0.14%, and Nasdaq 100 E-minis NQcv1 were down 19.25 points, or 0.08%.

Focus will now be on July retail sales data, due later in the day, and the University of Michigan's report on consumer confidence, for clues on the health of the American consumer.

Among other stocks, Applied Materials tumbled 14.1% after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks.

Shares of other chip equipment makers such as KLA KLAC.O and Lam Research LRCX.O lost 5.8% and 5%, respectively.

Intel INTC.O rose 2.7% on the heels of a 20% gain this week after a report said the Trump administration was in talks with the struggling chipmaker for the U.S. government to potentially take a stake in the company.

On the commodities front, crude prices slipped to around $65 a barrel with attention on a meeting in Alaska between U.S. President Donald Trump and his Russian counterpart, Vladimir Putin, that markets hope could pave the way for a resolution to the Ukraine conflict. The meeting will take place at 1900 GMT.