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Intel ( INTC ) rises after report chipmaker qualifies for federal

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Alcoa ( AA ) up after announcing stake sale in Ma'aden joint

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Futures: Dow up 0.21%, S&P 500 up 0.03%, Nasdaq off 0.20%

(Updated at 07:00 a.m. ET/1100 GMT)

By Johann M Cherian and Purvi Agarwal

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

subdued on Monday as caution prevailed ahead of the Federal

Reserve's pivotal monetary policy decision 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 witnessed 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 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 jumps in about 11 months on Friday,

although analysts attributed the optimism to signs of a robust

economy rather than rate-cut expectations.

At 07:00 a.m. ET, Dow E-minis were up 85 points, or

0.21%, S&P 500 E-minis were up 2 points, or 0.03%, and

Nasdaq 100 E-minis were down 38.5 points, or 0.20%.

Futures tracking small caps, which tend to do well

with lower borrowing costs, outperformed with a 0.72% rise. The

Russell 2000 index has gained over 7% so far this year

and hit its highest level in over a week on Friday.

In economic data, retail sales, weekly jobless claims,

housing starts and industrial production are due through the

week.

Among rate-sensitive growth stocks, Nvidia ( NVDA ) slipped

0.9%, while Meta inched up 0.15% and Tesla

rose 0.44% in premarket trading.

Intel Corp ( INTC ) climbed 2% after a report showed the

chipmaker has 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 3.7% 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 2.2% and Riot Platforms ( RIOT ) slipping 1.5%, tracking a

2% fall in bitcoin prices.

Alcoa ( AA ) gained 1.4% after the aluminum maker said on

Sunday it would sell a 25.1% stake in its joint venture with

Saudi Arabia's Ma'aden for $1.1 billion.