US STOCKS-Wall Street futures edge lower after rally, indexes set for weekly gains

By Purvi Agarwal and Ragini Mathur

Sept 12 (Reuters) - Wall Street futures eased on Friday after the three main U.S. indexes scaled record highs in the previous session and were on track to log gains in a week of economic reports that solidified expectations for Federal Reserve interest rate cuts.

Wall Street on Thursday was boosted by a rally in shares of Tesla TSLA.O and Micron Technology MU.O, 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 7.3%, CME's FedWatch tool showed.

After the inflation data, market pricing now reflects expectations for three quarter-point cuts - one at each remaining Fed meeting this year.

"Markets are pricing in a near certainty that the Fed will cut its policy rate on Wednesday, and are pretty sure this is the first of a few cuts," said Brian Jacobsen, chief economist at Annex Wealth Management.

"Don't expect any clear signal from the Fed that it intends on starting a sequence of cuts. It will likely want to at least say it is going to keep its options open."

Next in the line is a preliminary reading of the University of Michigan's consumer sentiment survey, which is due at 10.00 a.m. ET.

At 7:14 a.m. ET, Dow E-minis YMcv1 were down 103 points, or 0.22%, Nasdaq 100 E-minis NQcv1 were lower 3.5 points, or 0.01% and S&P 500 E-minis EScv1 were down 8 points, or 0.12%.

The Nasdaq and the S&P 500 are poised to record gains for the second consecutive week in September, largely helped by a revival in artificial intelligence trade after cloud computing giant Oracle's ORCL.N 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 .SPLRCT 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 WBD.O was 5.5% higher in premarket trading, extending Wednesday's over 28% gains, as a source said Paramount Skydance PSKY.O was preparing a bid for the Hollywood studio.

Photoshop-maker Adobe ADBE.O gained 2.9% after raising its annual profit and revenue forecasts.

Microsoft MSFT.O inched up 1.1% after it reached a non-binding deal with OpenAI to allow it to restructure itself into a for-profit company.

Super Micro Computer SMCI.O rose 5.4% after the AI server maker began volume shipments of Nvidia's NVDA.O blackwell ultra systems.