(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

*

Futures: Dow up 0.11%, S&P 500 up 0.01%, Nasdaq off 0.01%

Sept 18 (Reuters) - U.S. stock index futures were

subdued on Wednesday as skittish investors waited for the

Federal Reserve to cut interest rates for the first time in more

than four years, with most traders betting on a

half-percentage-point reduction.

Borrowing costs have stayed at their highest levels in over

two decades since July 2023, when the central bank last hiked

interest rates by 25 basis points to between 5.25% and 5.50%.

At 04:44 a.m. ET, Dow E-minis were up 44 points, or

0.11%, S&P 500 E-minis were up 0.5 point, or 0.01%, and

Nasdaq 100 E-minis were down 2.5 points, or 0.01%

Futures linked to the Russell 2000 index, tracking

small caps which tend to fare better in a lower interest-rate

environment, were also flat.

The benchmark S&P 500 and the blue-chip Dow

both recovered from an early August rout to clinch intraday

record highs in the previous session, after a batch of economic

data hinted at a still-robust economy ahead of the Federal

Reserve decision, expected at 2:00 p.m. ET.

However, uncertainty looms on the size of the rate cut.

Following dovish commentary from present and former Fed

officials, traders now see a 63% chance of a bigger

50-basis-point reduction, according to the CME Group's FedWatch

tool.

Analysts, however, caution that an outsize move from the

central bank could spook markets, which are already nervous

about the overall health of the world's biggest economy.

Bets for a smaller 25-bps cut have now slipped to 37% from

86% a week ago. Investors will also be watching for comments

from Fed Chair Jerome Powell at 2:30 p.m. ET to gauge the

central bank's stance on the economy and prospects of further

rate cuts this year.

"Powell would need to provide solid macro justifications for

a half-point move to avoid sounding too sensitive to market rate

expectations," analysts at ING Bank said.

"Incidentally, Powell would need to show the 50 bps cut

isn't a 'panic' move. Failing to offer such reassurance can

cause turmoil in equities."

Markets have rallied this year, with all three major indexes

setting record highs on prospects of lower interest rates as

inflation moderated and the jobs market showed gradual signs of

cooling.

Heavyweight growth stocks were mixed in premarket trading.

Apple ( AAPL ) fell 0.60%, Nvidia ( NVDA ) dipped 0.51%, while

Alphabet and Microsoft ( MSFT ) inched up 0.15% and

0.31%, respectively.

Among top movers, Intuitive Machines ( LUNR ) jumped 42%

after clinching a $4.8 billion navigation services contract from

NASA.