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

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

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Fed rate decision due at 2:00 p.m. ET

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Intuitive Machines ( LUNR ) soars after clinching NASA contract

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US Steel up as CFIUS delays Nippon merger decision,

sources say

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Indexes: Dow off 0.11%, S&P 500 edges up 0.06%, Nasdaq up

0.13%

(Updated at 9:45 a.m. ET/1345 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 18 (Reuters) - Wall Street's main indexes were flat

on Wednesday as investors stepped onto the sidelines ahead of

the Federal Reserve's highly anticipated first interest rate cut

in more than four years, with bets favoring a 50-basis-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% to

combat inflation. But the focus recently has been more about a

moderating labor market.

At 9:45 a.m., the Dow Jones Industrial Average fell

40.18 points, or 0.11%, to 41,560.69, the S&P 500 gained

3.11 points, or 0.06%, to 5,637.69 and the Nasdaq Composite

edged up 22.76 points, or 0.13%, to 17,650.82.

Nine of the 11 S&P 500 sectors traded flat, although

energy and industrials edged up 0.3% each.

The Russell 2000 index, tracking small caps which

tend to fare better in a lower interest-rate environment, crept

up 0.19%.

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

both recovered from an early August rout and are trading just

shy of their respective record highs ahead of the Fed decision,

expected at 2:00 p.m. ET.

Economic indicators over the previous one month have been

relatively mixed, making investors nervous ahead of the least

predictable Fed decision in years.

Following dovish commentary from present and former Fed

officials recently, traders are now pricing in 61% chances of a

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

FedWatch tool.

Some analysts, however, caution that an outsized move

from the central bank could spook markets.

Bets for a smaller 25-bps cut have now slipped to 39% 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.

"It's been the first meeting in a while that you have no

100% consensus on whether it's going to be one

(quarter-percentage-point) cut or two," said Mike Dickson, head

of research in quantitative strategies at Horizon Investments.

"No matter what happens today, there's going to be some

people that get what they expected and some people that don't."

Stock

options are pricing

an about 1.1% swing, in either direction, for the S&P 500

after the Fed's verdict, according to options analytics service

ORATS.

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 such as Apple ( AAPL ) climbed 1%

and Alphabet added 0.41%, while Microsoft ( MSFT )

slipped 0.57%.

Intuitive Machines ( LUNR ) jumped 52% after clinching a

$4.8 billion navigation services contract from NASA.

U.S. Steel rose 1.7% after sources said the U.S.

national security panel reviewing Nippon Steel's ( NISTF ) bid

for the U.S.-based steel maker let the companies refile their

application for approval of the deal.

Advancing issues outnumbered decliners by a 1.75-to-1

ratio on the NYSE and by a 1.26-to-1 ratio on the Nasdaq.

The S&P 500 posted 16 new 52-week highs and no new lows,

while the Nasdaq Composite recorded 23 new highs and 21 new

lows.