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Bristol-Myers Squibb ( BMY ) gains after FDA approves

schizophrenia drug

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Costco Wholesale ( COST ) slips after Q4 revenue misses estimates

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Futures off: Dow 0.05%, S&P 500 0.12%, Nasdaq 0.26%

(Updated at 6:58 a.m. ET/1058 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 27 (Reuters) - U.S. stock index futures inched

lower on Friday, as investors refrained from placing big bets

ahead of a crucial inflation report which could sway

expectations on the size of upcoming interest rate cuts by the

Federal Reserve.

The Commerce Department's report, due at 8:30 a.m. ET, is

expected to show the personal consumption expenditure index -

the Fed's preferred inflation gauge - rose by 2.3% in August,

according to economists polled by Reuters, down from 2.5% the

month before.

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.

"Even in the case of a small deviation from consensus, the

recent shift in the Fed's focus to the employment side of its

mandate means markets are less sensitive to inflation news,"

strategists at ING Bank said.

Data through the week points to a still-resilient economy

overall, leaving traders uncertain about the Fed's next move.

Odds of another outsized move at the central bank's November

meeting stand at 50.8%, as per the CME Group's FedWatch Tool.

Those for a 25 bps reduction stand at 49.2%.

At 6:58 a.m. ET, Dow E-minis were down 22

points, or 0.05%, S&P 500 E-minis were down 7 points, or

0.12% and Nasdaq 100 E-minis were down 53.75 points, or

0.26%.

Futures tied to the Russell 2000 index, which

tracks small caps, were 0.2% higher.

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 6%

after the U.S. FDA approved its schizophrenia drug, providing

patients with a treatment option that reduces symptoms of the

mental disorder without common side effects.

Costco Wholesale ( COST ) dropped 1.3% after missing market

expectations for fourth-quarter revenue, hurt by cautious

consumer spending on pricier items at its membership-only stores

and lower gasoline prices.

Dollar General ( DG ) slipped 2.1% after Citigroup

downgraded the discount retail chain to "sell" from "neutral".

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

rose 0.7%, PDD Holdings ( PDD ) climbed 2.2% and NetEase

gained 2.1% tracking domestic stocks 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 2.8% 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.