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Futures up: Dow 0.15%, S&P 500 0.08%, Nasdaq 0.08%

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Applied Materials ( AMAT ) flags $600 mln revenue hit in 2026

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USA Rare Earth ( USAR ) rises after report of talks with White

House

(Updates with late-morning trading)

By Niket Nishant and Sukriti Gupta

Oct 3 (Reuters) -

Wall Street's main indexes looked set to climb on Friday as

optimism about an imminent interest-rate cut by the Federal

Reserve boosted sentiment ahead of the final trading session of

a week that saw volatility due to the U.S. government shutdown.

The federal shutdown, which began on Wednesday, has

disrupted the flow of critical data the U.S. central bank uses

to assess if economic conditions justify a reduction in

borrowing costs.

The highly anticipated nonfarm payrolls report originally

scheduled for a Friday release has now been postponed, leaving

investors to rely on other indicators. These suggest a softening

in the labor market, keeping bets on an impending rate cut

alive.

The optimism, coupled with strength in the technology

sector, has so far helped investors look past the impasse in

Washington.

The three main indexes marked record closing highs on

Thursday and were on track to notch weekly gains if the current

levels hold through Friday's session.

"The market's focused on a couple of different things

instead of the shutdown. One is the AI optimism that we've seen

over recent days, and then the data that came out this week is

pretty supportive of the Fed being able to cut rates," said

Veronica Willis, global investment strategist at Wells Fargo

Investment Institute in New York.

At 08:26 a.m. ET, Dow E-minis rose 68 points, or

0.15%, S&P 500 E-minis added 5.75 points, or 0.08%, and

Nasdaq 100 E-minis were up 21.25 points, or 0.08%.

Still, the rally has shown signs of fragility, with stocks

occasionally retreating as traders lock in gains.

Investors will now turn to the Institute for Supply

Management's non-manufacturing PMI data for September that is

due later in the day. The final readings of S&P Global services

and composite PMIs for September are also on deck.

These data points may influence near-term expectations for

the Fed's actions, making equities susceptible to

headline-driven swings.

New York Fed President John Williams said central banks

needed to be aware that unpredictable changes were inevitable

and strategize to operate in those environments.

Dallas Fed President Lorie Logan will speak at a conference

later in the day.

Fed Vice Chair Philip Jefferson is also scheduled to discuss

the U.S. economic outlook and policy framework in Philadelphia.

In stocks, Tesla rose about 1.4% in premarket

trading after dropping more than 5% on Thursday.

Shares of USA Rare Earth ( USAR ) jumped 13.4% after CEO

Barbara Humpton told CNBC the company was "in close

communication" with the White House.

Applied Materials ( AMAT ) fell 2.1% after the

chip-equipment maker forecast a $600 million hit to fiscal 2026

revenue on broader semiconductor export curbs. Shares of peer

Lam Research ( LRCX ) shed 1.4%.