US STOCKS-Wall St set to open lower after Powell urges caution on rate cuts

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Updated at 08:45 a.m. ET/ 1345 GMT

By Lisa Pauline Mattackal and Purvi Agarwal

Nov 15 (Reuters) - Wall Street's main indexes were poised for a lower open on Friday after Federal Reserve Chair Jerome Powell said there was no need to rush interest-rate cuts, pushing up bond yields and pressuring rate-sensitive equities.

In a speech on Thursday, Powell pointed to ongoing economic growth, a solid job market, and inflation above the Fed's 2% target as reasons the central bank can afford to be careful as they determine the pace and scope of rate cuts going forward.

U.S. Treasury yields rose broadly after Powell's comments, while Wall Street's main indexes closed lower.

Traders increased bets that the Fed will keep rates on hold at its December meeting - pricing in a 45% chance, compared with 14% a month ago, according to the CME FedWatch tool. They now expect only about 71 basis points of total easing by the end of 2025, per LSEG calculations.

A Commerce Department report showed retail sales rose 0.4% in October on a monthly basis, compared with estimates for a 0.3% rise, according to economists polled by Reuters.

"The retail sales number was overall pretty good. That's exactly what Powell was talking about yesterday, where if the economy continues to be reasonably strong and inflation is approaching our target, they can afford to be patient and go slower with rate cuts than previously thought," said Mike Dickson, head of research and quantitative strategies at Horizon Investments.

All three major U.S. stock indexes were headed for weekly losses, as a sharp post-election rally fizzled out with market focus shifting to the state of the economy and potential inflation risks under a second Donald Trump presidency.

However, U.S. equity funds witnessed robust inflows in the week through Nov. 13, on optimism that Trump's return to the White House would benefit the outlook for corporate earnings.

Stocks of vaccine makers lost ground after the President-elect selected Robert F Kennedy Jr, who has spread misinformation on vaccines, to head the Department of Health and Human Services.

BioNTech BNTX.O dropped 3.7%, while Moderna MRNA.O and Novavax NVAX.O fell more than 2% in premarket trading. Pfizer PFE.N dipped 1.3%.

Dow E-minis 1YMcv1 were down 165 points, or 0.38%, S&P 500 E-minis EScv1 were down 34 points, or 0.57%, and Nasdaq 100 E-minis NQcv1 were down 197.5 points, or 0.94%.

Futures tracking the more rate-sensitive, small-cap Russell 2000 RTYcv1 dropped 0.2%.

Megacap stocks also fell. Nvidia NVDA.O edged 1% lower, Apple AAPL.O dropped 0.9% and Alphabet GOOGL.O was down 0.4%.

Powell's comments come after both consumer and producer prices data this week pointed to persistent inflation.

Remarks from Fed officials Susan Collins and John Williams are also expected.

Applied Materials AMAT.O fell 8.6% after the chipmaking equipment supplier forecast first-quarter revenue below Wall Street estimates on Thursday.

Warren Buffett's Berkshire Hathaway BRKa.N said on Thursday it made new investments in Domino's Pizza DPZ.N and sold its entire stake in cosmetics chain Ulta Beauty ULTA.O.

Domino's shares were up 5%, while Ulta was down 5.5%.

(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Devika Syamnath)

((LisaPauline.Mattackal@thomsonreuters.com;))