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Fed's rate decision expected at 2:00 p.m. ET

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Birkenstock ( BIRK ) up after beating estimates for Q4 results

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Merck ( MRK ) gains after signing up to $2 bln obesity drug deal

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Indexes: Dow up 0.15%, S&P 500, Nasdaq off 0.10% each

(Updates after markets open)

By Lisa Pauline Mattackal and Purvi Agarwal

Dec 18 (Reuters) -

Wall Street's main indexes were subdued in choppy trading on

Wednesday, as investors anticipated an interest rate cut from

the Federal Reserve in its final meeting of the year and awaited

clues on what policymakers could do in 2025.

The Fed is widely expected to reduce interest rates by 25

basis points at its meeting. The announcement is expected at 2

p.m. ET on Wednesday.

With a rate cut expected by most investors, more focus

is on the Fed's summary of economic projections (SEP), which

includes policymakers' forecasts for the economy and the "dot

plot" of their expectations for interest rates over the longer

term.

Comments from Chair Jerome Powell will also be watched

for clues on how the central bank will determine policy next

year, as recent economic data has shown both strong growth and

persistent inflation that could keep the Fed from cutting rates

as much as previously forecast.

"The question is more about what happens next and what's

the rhetoric around 2025. Powell really kind of kept markets

stable enough to continue the upward trajectory in 2022, and we

expect today to be similar," said Keith Buchanan, senior

portfolio manager, Globalt Investments.

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

rose 65.44 points, or 0.15%, to 43,514.59, the S&P 500

lost 5.81 points, or 0.10%, to 6,044.65 and the Nasdaq Composite

lost 20.19 points, or 0.10%, to 20,088.87.

Most rate-sensitive megacap and growth stocks were down,

with Tesla in the lead, dropping 2.7% after rising over

14% in the last three sessions.

On the flip side, AI giant Nvidia ( NVDA ) was up 3.8%

after hitting an over two-month low on Tuesday.

Yield on the benchmark 10 year Treasury bond

ticked higher with the change in Fed expectations, adding

pressure on rate-sensitive stocks. It was last at 4.3968%.

Birkenstock ( BIRK ) advanced 7.8% after the footwear maker

beat market expectations for fourth-quarter results, while

General Mills ( GIS ) fell 4% after the Cheerios maker slashed

its annual profit forecast.

The Dow is set to snap a nine-session losing streak, its

longest since February 1978, on a boost by healthcare stocks.

Dow-component Merck ( MRK ) gained marginally after the

drugmaker signed a deal worth up to $2 billion with Hansoh

Pharmaceuticals to develop and commercialize the

Chinese biotech's experimental obesity drug.

Despite some jitters over future Fed policy, stocks are on

track to end the year strong with the S&P 500 up nearly 27%, the

Nasdaq up nearly 34% and the Dow up over 15%.

The rally has been fueled by technology companies that

capitalized on the euphoria around artificial intelligence, the

prospects of a lower rate environment and hope of pro-business

policies from the incoming Donald Trump administration.

Crypto-focused stocks slipped as bitcoin fell 1.9%.

MARA Holdings ( MARA ) and Riot Platforms ( RIOT ) down 2.1% and

1.9%, respectively.

Advancing issues outnumbered decliners by a 1.24-to-1

ratio on the NYSE and by a 1.4-to-1 ratio on the Nasdaq.

The S&P 500 posted three new 52-week highs and five new

lows, while the Nasdaq Composite recorded 48 new highs and 47

new lows.