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Futures: Dow flat, S&P 500 down 0.05%, Nasdaq off 0.06%

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Market fully prices in 25 bp rate cut for September

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July producer inflation data, weekly jobless claims due

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Deere, Tapestry flag strains from US tariffs

(Updates with results from Deere and Tapestry)

By Johann M Cherian and Sanchayaita Roy

Aug 14 (Reuters) - U.S. stock index futures were muted

on Thursday following a strong run on Wall Street this week and

investors awaited fresh economic data to gauge the Federal

Reserve's monetary policy verdict next month.

Data reflecting labor market weakness has strengthened

expectations that the central bank will potentially lower

interest rates next month, despite another report suggesting

underlying price pressures are on the rise.

The expectations for a dovish Fed encouraged investors to

lap up riskier equities, sending the benchmark S&P 500

and tech-heavy Nasdaq to record highs in the previous

two sessions, and putting the blue-chip Dow within

striking distance of an all-time high.

Traders are fully pricing in a 25-basis-point interest rate

cut by the central bank in September, according to the CME

FedWatch tool, and expect cuts of a similar size in October and

December.

Analysts are not so sure.

"The market is too complacent about the apparent certainty

the Fed will cut next month, especially with inflation having

been above target for 53 months running, and clearly moving in

the wrong direction," said Michael Brown, senior research

strategist at Pepperstone.

A report also showed San Francisco Fed President Mary Daly

pushed back against the need for a 50-basis-point interest rate

cut next month, a day after Treasury Secretary Scott Bessent

said an aggressive half-point cut was possible.

At 07:10 a.m. ET, Dow E-minis were down 2 points, or

flat, S&P 500 E-minis were down 3.5 points, or 0.05%,

and Nasdaq 100 E-minis were down 13.25 points, or 0.06%.

Focus is now on a string of data due at 8:30 a.m. ET,

including weekly jobless claims and Producer Price Index for the

month of July, at a time when markets are also concerned about

the quality of economic data.

Some of the components of the producer inflation report

feeds into the Fed's preferred inflation gauge - the Personal

Consumption Expenditures Price Index.

Wall Street's recovery from April lows has also elevated

valuations of the S&P 500 beyond long-term averages, aided by

better-than-expected earnings from megacap companies and more

clarity on trade deals.

"I retain my bullish equity bias. Frankly, it's tough not to

- earnings growth is impressive; the tone on trade is becoming

much softer; the economy remains resilient; and, even if that

final point falters, the Fed (has) plenty of room to ease," said

Brown.

Cisco Systems ( CSCO ) forecast first-quarter revenue above

estimates, driven by the artificial intelligence boom. Shares

were down 1% in premarket trading.

Deere & Co ( DE ) fell 7.7% after the farm-equipment maker

reported a lower quarterly profit and tightened its annual

profit forecast, while Tapestry plunged 12% after the

Coach handbag maker posted its annual profit forecast below

estimates.

Both companies warned of tariffs impacting their business.

Later in the day, investors will also tune into remarks from

St. Louis Fed President Alberto Musalem, a Federal Open Market

Committee voting member this year.