Wall Street futures ease slightly, indexes set for weekly gains

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)