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Futures: Dow up 0.23%, S&P 500 up 0.12%, Nasdaq off 0.02%

Sept 16 (Reuters) - U.S. stock index futures were flat

to slightly higher on Monday as caution prevailed ahead of a

pivotal monetary policy decision by the Federal Reserve later in

the week, with investors pricing in a steep reduction in

borrowing costs.

Ever since Fed Chair Jerome Powell hinted at an upcoming

rate cut late last year, markets have embarked on a bull run,

with the S&P 500 and the Dow now near record

highs.

However, following a mixed batch of economic data and

comments from a former policymaker in the last few weeks,

traders swayed in their bets on what decision the central bank

will arrive at during its Sept. 17 to 18 meeting.

Odds for a 50-basis-point cut are at 59% from 30% a week

ago, according to the CME FedWatch Tool, which showed a 41%

probability for a 25-basis-point reduction. There is concern

that an outsized move could mean the Fed sees the economy

cooling at a faster pace.

"As important as the 25 vs 50 debate will be the

communication from the Fed. Would a 50bps be the start of 50s or

a one off larger move to start the cycle? Would a 25bps mean the

bar for subsequent 50s is high? There will be lots to digest," a

group of strategists at Deutsche Bank led by Jim Reid said in a

note.

The benchmark index and the tech-heavy Nasdaq

notched their biggest weekly jump in about 11 months on Friday,

although analysts attributed the optimism to signs of a robust

economy rather than rate-cut expectations.

At 05:32 a.m., Dow E-minis were up 95 points, or

0.23%, S&P 500 E-minis were up 6.5 points, or 0.12% and

Nasdaq 100 E-minis were down 4.5 points, or 0.02%

Futures tracking small caps, which tend to do well

with lower borrowing costs, outperformed with a 0.90% rise.

Economic data due through the week is light, with retail

sales, weekly jobless claims, housing starts and industrial

production on tap.

Rate-sensitive growth stocks such as Nvidia ( NVDA ) slipped

0.40%, while Meta inched up 0.30% and Tesla

rose 0.60% in premarket trading.

Intel Corp ( INTC ) climbed 3.7% after a report showed the

chipmaker had officially qualified for as much as $3.5 billion

in federal grants to make semiconductors for the U.S. Department

of Defense.

Trump Media & Technology ( DJT ) added 4.5% after an

apparent second assassination attempt on the Republican

candidate and former president on Sunday, weeks before the

closely watched U.S. presidential election.

Crypto stocks trended lower, with Microstrategy ( MSTR )

down 2% and Riot Platforms ( RIOT ) slipping 1.4%, tracking a

1.7% fall in bitcoin prices.