Wall Street set for higher open as spotlight turns to Powell

By Medha Singh and Johann M Cherian

(Reuters) - Wall Street's main indexes were set to open higher on Friday ahead of a speech from Federal Reserve Chair Jerome Powell that investors expect will offer hints on the pace of rate cuts in the world's biggest economy.

While minutes from the Fed's July meeting this week showed a number of policymakers were ready to consider rate cuts come September, Powell's speech could offer insights on the pace of easing and how the central bank will respond as the economy evolves.

Powell is scheduled to speak at 10 a.m. ET (1400 GMT) at the annual global gathering of central bank officials at the Jackson Hole Economic Symposium in Wyoming.

Traders have fully priced in a scenario where the Fed begins easing interest rates at its Sept. 17-18 meeting, with a 71.5% chance of a 25-basis-point cut over a 50 bps cut, according to CME Group's FedWatch tool.

"The market has been predicting the first rate cut to start going back to March of this year and investors have been disappointed multiple times," said Sam Stovall, chief investment strategist at CFRA Research in New York.

"The only question is by how much and, unlike the sprinters in the Olympics, the Fed will not explode out of the blocks with a 50-basis-point cut."

Recent data including weekly jobless claims and payrolls revisions signaled the U.S. economy was slowing, albeit gradually, assuaging fears over a sharp downturn.

That has helped Wall Street's three main indexes recover from a plunge earlier this month triggered by a dour July employment report and yen carry trade. The S&P 500 is now about 1.8% away from a record high touched in mid-July, after falling as much as 9.7% from that level.

At 08:15 a.m. ET, Dow E-minis were up 161 points, or 0.39%, while S&P 500 E-minis were up 0.53%. Nasdaq 100 E-minis were up 153.25 points, or 0.78%.

Chip stocks such as Nvidia, Broadcom and Qualcomm climbed more than 1% each in trading before the bell, rebounding from sharp losses in the previous session. The Philadelphia chip index notched its biggest daily drop in three weeks on Thursday.

Rate-sensitive growth stocks such as Apple climbed 0.7%, while Amazon.com and Tesla rose about 1% each, looking to bounce back from Thursday's losses.

Workday shares jumped 15% after the human resource software provider beat market expectations for second-quarter revenue and announced a $1 billion stock buyback plan.

Cruise will offer its autonomous vehicles on ride-hailing platform Uber starting next year, the companies said, as the General Motors-backed robotaxi firm attempts a comeback, sending shares of the automaker up 1.1%.

Ross Stores gained 5.7% after the discount retailer raised its fiscal 2024 profit forecast.

Later in the day, data from the U.S. Commerce Department's Census Bureau is expected to show new home sales steadied in July after hitting a seven-month low in June.

(Reporting by Medha Singh and Johann M Cherian in Bengaluru; Editing by Devika Syamnath)