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Apple ( AAPL ) falls after analyst flags weak demand for new

iPhones

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Intel ( INTC ) rises after report chipmaker qualifies for federal

grants

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

venture

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Futures: Dow up 0.25%, S&P 500 down 0.08%, Nasdaq down

0.45%

(Updated at 08:30 a.m. ET/ 1230 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 16 (Reuters) -

The main U.S. stock indexes were set for a mixed open on

Monday as caution set in on Wall Street ahead of the Federal

Reserve's pivotal monetary policy decision, due later in the

week, with a majority of traders pricing in a steep cut in

borrowing costs.

Following a diverse 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 would arrive at

during its Sept. 17 to 18 meeting.

Odds for a 50-basis-point cut are at 65% from 30% a week

ago, according to the CME FedWatch Tool, which showed a 35%

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

outsized move could mean the Fed sees the economy cooling at a

faster-than-anticipated pace.

"Influential investors have been talking about the need for

a 50-basis-point cut and we're seeing increased talk of

recession risks. As a result, there's betting that we will get

something other than the 25-bps cut," said Sam Stovall, chief

investment strategist at CFRA Research.

"It would be a good thing for the Fed to imply that they

are ahead of the curve."

Markets have been in a bull run since the start of this

year on expectations the world's most influential central bank

would kick off its monetary policy easing cycle soon. The S&P

500 and the Dow are currently near record highs.

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 08:30 a.m., Dow E-minis were up 102 points, or

0.25%, S&P 500 E-minis were down 4.5 points, or 0.08%

and Nasdaq 100 E-minis were down 88.75 points, or 0.45%.

Futures tracking small caps, which tend to do well

with lower borrowing costs, outperformed with a 0.42% 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

1.7%, while Microsoft ( MSFT ) and Tesla dipped 0.20%

each in premarket trading.

Most semiconductor stocks also traded lower, with Micron

Technology ( MU ) down 3% after hitting a near-two week high on

Friday. Broadcom ( AVGO ) and Qualcomm ( QCOM ) was each off

more than 1.3%.

Apple ( AAPL ) slipped 2.5% after an analyst at TF

International Securities said demand for its latest iPhone 16

models was lower than expected.

Intel Corp ( INTC ) climbed 1.3% 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.

Crypto stocks trended lower, with MicroStrategy ( MSTR ) and

Coinbase slipping more than 2% each as bitcoin prices

fell.

Alcoa ( AA ) gained 1.6% 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.

U.S.-listed shares of Bausch + Lomb jumped 20%

after a report said the eye care firm was exploring a sale.