US pre-open: Futures point to further gains as markets eye rate cuts

US stock futures were pointing to more gains on Wall Street on Friday, with the S&P 500 and Nasdaq set for their fifth straight session in positive territory ahead of next week's anticipated rate cut by the Federal Reserve.

By 0517 ET, futures on the Dow, S&P 500 and Nasdaq were up between 0.1% and 0.2%.

Helping sentiment ahead of the opening bell were comments by a former top US central bank official who said the size of the Fed's first interest rate cut in the current cycle was still up in the air.

Markets widely expect the Federal Funds Rate to be reduced by 25 basis points from the current 5.25%-5.50% range – where it stayed since July 2023 – when policymakers meet on 17-18 September, with two further cuts likely this year.

However, in remarks made at a forum organised by The Breton Woods Committee, former New York Fed chief William Dudley said he saw a "strong" case for a 50 basis-point reduction. "I know what I'd be pushing for," Dudley said, according to Bloomberg. As recently as the previous week, Dudley had been anticipating a 25bp cut.

The former central banker also highlighted how "very unusual" it was for there to be this level of uncertainty on the outcome of a Fed meeting this near to the next policy announcement. However, he added that the Fed usually did not like to surprise markets.

Friday's agenda will likely focus on US consumer confidence data, with the University of Michigan's sentiment index for September expected to inch higher to 68.0 from 67.9. The Department of Labor will also release import price figures for the month of August.

Stocks to watch on Friday include software giants Adobe and Oracle following the release of their quarterly earnings after the closing bell on Thursday.

Adobe futures were down 8% after the Photoshop and InDesign software group underwhelmed with its guidance for the fourth quarter, while Oracle was rising 6% after lifting its medium-term revenue guidance above analysts' forecasts.