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Futures: Dow up 0.06%, S&P 500 off 0.03%, Nasdaq down

0.23%

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Alphabet up after report on talks with Meta to supply AI

chips

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Nvidia ( NVDA ), AMD lead declines after Alphabet report

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Retail sales, producer inflation data in focus

(Updates to before markets open)

By Johann M Cherian

Nov 25 (Reuters) - Wall Street's main indexes were set

for a subdued start on Tuesday as investors took stock of a

series of delayed economic data to gauge the health of the U.S.

economy, while Alphabet gained after a report said Meta was in

talks to spend billions on the Google parent's chips.

A Commerce Department report showed retail sales increased

0.2% in September, less than the 0.4% rise that economists

polled by Reuters were anticipating, at a time when U.S. tariffs

and a string of corporate layoffs have weighed on sentiment.

A separate report showed producer prices rebounded in

September as the cost of energy goods surged and producers

passed on some tariffs.

Trader bets for an interest rate cut of 25 basis points next

month were little changed following the data and were last at an

84.7% chance, doubling from around 40% last week, according to

the CME Group's FedWatch Tool.

Market sentiment has recently been supported by growing bets

the Federal Reserve will lower borrowing costs in December

following dovish remarks by voting members on the Federal Open

Market Committee such as John Williams and Christopher Waller.

"The fact the parade of Fed speakers is going to end soon

with the quiet period kicking in today, we'll likely have the

potential for the rate cut kind of sit where it is. And while it

might be a split decision, we're likely to get another rate cut

and that's likely a positive for markets," said Art Hogan, chief

market strategist at B. Riley Wealth.

At 08:53 a.m. ET, Dow E-minis were up 30 points,

or 0.06%, S&P 500 E-minis were down 1.75 points,

or 0.03%, with 166,901 contracts changing hands and Nasdaq 100

E-minis were down 57.75 points, or 0.23%.

AI OPTIMISM BOOSTS ALPHABET

Alphabet's shares were a standout, jumping 4% in

premarket trading after a report said Facebook-parent Meta

Platforms was in discussions to use Google's AI chips

in its data centers from 2027 and rent chips from Google Cloud

by next year.

Broadcom ( AVGO ), which helps Alphabet make its AI chips

gained 4%, while Nvidia ( NVDA ) and Advanced Micro Devices ( AMD )

, which currently dominate the AI chips sector, fell

nearly 4.7% and 7.5%, respectively.

Shares of the Google parent have rallied almost 70% this

year, outperforming other megacaps and bringing it close to the

prized $4 trillion market capitalization.

The Nasdaq logged its biggest one-day gain in six

months on Monday, as investors scooped up tech stocks following

several bouts of selling in recent weeks driven by worries of

stretched valuations in the sector and high AI spending by large

companies.

Meanwhile, the hunt for the next Fed Chair was on, with

Treasury Secretary Scott Bessent saying the announcement could

come as soon as pre-Christmas.

On the earnings front, department store operator Kohl's

jumped 27.4% after raising its annual forecast. Apparel

retailer Burlington Stores ( BURL ) tumbled 6.4% after its

third-quarter revenue missed estimates.

For retailers, the holiday shopping season this month

between the Thanksgiving holiday on Thursday through Cyber

Monday next week will be crucial for sales.

Among other stocks, U.S.-listed shares of Alibaba

rose 2.9% after the Chinese e-commerce giant beat analysts'

estimates for quarterly revenue.