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U.S. PCE stands at 2.2% in Aug

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Russell 2000 futures up nearly 1%

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Bristol-Myers gains after schizophrenia drug approval

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Costco Wholesale ( COST ) slips after Q4 revenue misses estimates

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Futures up: Dow 0.21%, S&P 500 0.18%, Nasdaq 0.18%

(Updated at 8:45 a.m. ET/1245 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 27 (Reuters) -

Wall Street was set for a marginally higher open on Friday

after data underscored the narrative that price pressures were

cooling, raising expectations that the Federal Reserve's next

move might be another outsized interest rate cut.

A Commerce Department report showed the personal

consumption expenditure (PCE) index, the Fed's preferred

inflation measure, rose 2.2% in August on an annual basis,

compared with estimates of 2.3%, as per economists polled by

Reuters. On a monthly basis, it rose 0.1%.

Odds that the central bank will cut rates by 50 basis

points at its November meeting stood at about 53%, compared with

50% seen before the data. Those for a 25 bps reduction stand at

about 47%, as per the CME Group's FedWatch Tool.

Rate-sensitive growth stocks were mixed in premarket

trading, as yields on short-term Treasury bonds

dipped following the data.

Tesla added 1% and Alphabet climbed

0.3% in premarket trading, while Nvidia ( NVDA ) and Amazon.com ( AMZN )

were flat.

"It's a relief to have (inflation) move in the right

direction and hopefully it continues going in that direction,"

said Joe Saluzzi, co-head of equity trading at Themis Trading.

"It really doesn't matter whether it's 50 bps or 25 bps.

What matters is, will they continue cutting rates over the next

year?"

Inflation moderating towards the central bank's 2%

target gave the Fed enough room to commence its policy easing

cycle with a 50 basis point rate cut last week. Ensuring that

unemployment rates do not shoot up will be its focus now, with

all eyes on a slew of job reports due next week.

At 8:45 a.m. ET, Dow E-minis were up 90 points,

or 0.21%, S&P 500 E-minis were up 10.5 points, or 0.18%

and Nasdaq 100 E-minis were up 36.25 points, or 0.18%.

Futures tied to the Russell 2000 index, which

tracks small caps, outperformed with a 1% rise.

The University of Michigan's final September estimate on

consumer sentiment and remarks from Fed Governor Michelle Bowman

are also in focus on the day.

Late on Thursday, Fed Governor Lisa Cook said the central

bank's rare move earlier this month could address increased

"downside risks" to employment.

Wall Street's main indexes ended higher in the previous

session, with the S&P 500 closing at its highest levels

on record after an upbeat forecast from Micron

invigorated optimism around artificial intelligence.

The benchmark index along with the blue-chip Dow and

tech-heavy Nasdaq are on track for their third-straight week of

gains.

Among other stocks, Bristol Myers Squibb ( BMY ) surged

3.75% after the U.S. FDA approved its schizophrenia drug.

Costco Wholesale ( COST ) dropped 1% after posing downbeat

fourth-quarter revenue.

Dollar General ( DG ) slipped 1.9% after Citigroup

downgraded to "sell" from "neutral".

U.S.-listed shares of Chinese firms such as Alibaba

rose 1%, PDD Holdings ( PDD ) climbed 2.5% and NetEase

gained 2.1% after China's central bank lowered interest rates

and injected liquidity into the banking system, in its latest

stimulus move.

Miners such as Albemarle added 2.9% and U.S.-listed

shares of BHP rose 1% after a report showed top Chinese

cities Shanghai and Shenzhen are planning to lift key remaining

restrictions on home purchases to attract potential buyers.