US STOCKS-US futures drop as December rate-cut expectations ease

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Futures down: Dow 0.58%, S&P 500 0.92%, Nasdaq 1.38%

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Applied Materials (AMAT) falls after reduced China spending forecast

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Cidara Therapeutics (CDTX) soars on Merck's (MRK) buyout deal

(Updates with quote, prices)

By Twesha Dikshit and Purvi Agarwal

Nov 14 (Reuters) - U.S. stock index futures slid on Friday, signaling a fresh round of selloff on Wall Street after hawkish comments from Federal Reserve officials added to doubts about an interest rate cut in December.

The three major U.S. stock indexes posted their steepest one-day declines in over a month on Thursday, with heavyweight tech stocks leading the slump, after a growing number of Fed policymakers signaled reticence on further easing.

Investors continued to dump technology and AI stocks on worries about stretched valuations that have led to several bouts of selloff in recent weeks and put the Nasdaq on course for a second consecutive week of losses.

John Belton, portfolio manager at Gabelli Funds, said that market winners were being sold and a "reversion" for underperforming sectors such as healthcare and outperforming sectors such as technology were among reasons for the pullback.

At 7:20 a.m. ET, Dow E-minis were down 276 points, or 0.58%, S&P 500 E-minis were down 62 points, or 0.92% and Nasdaq 100 E-minis were down 346.75 points, or 1.38%.

The CBOE volatility index, Wall Street's fear gauge, touched a one-week high earlier and was last up 2.26 points at 22.26.

Fed speakers on Thursday added to dimming expectations of policy easing. St. Louis President Alberto Musalem said caution was needed, while Cleveland's head, Beth Hammack, said restrictive policy would help tackle inflation. Minneapolis' Neel Kashkari told Bloomberg News he had been against October's rate cut.

Expectations for a 25 point rate cut in December fell to 49.6% from last week's 67%, according to CME Group's FedWatch tool.

"Market sentiment is swinging wildly this week, reflecting a clash of narratives that has left investors struggling to find direction," said Daniela Hathorn, senior market analyst at Capital.com.

The historic U.S. government shutdown, which ended on Thursday, led to an economic data drought, leaving the Fed and traders flying blind and rekindled concerns about the health of the labor market and the inflation outlook.

Despite the reopening, some data gaps are likely to be permanent with the White House casting doubt on employment and Consumer Price Index reports for October ever being released.

Among others, Applied Materials (AMAT) shares dropped 6.6% in premarket trading after the company flagged expectations of weaker China spending next year on tighter U.S. export control curbs.

Other chipmakers also fell, with AI bellwether Nvidia (NVDA) down 3.2%. Broadcom (AVGO), Intel (INTC) and Advanced Micro Devices (AMD) fell between 2% and 4%.

Nvidia's (NVDA) results next week could further break or make the rally that has been the main driver behind indexes hitting all-time record highs this year.

Warner Bros Discovery (WBD) shares gained 2.8%. The entertainment company said it had amended CEO David Zaslav's employment agreement amid a strategic review of its business.

Cidara Therapeutics (CDTX) more than doubled after Merck (MRK) said it will acquire the company in a nearly $9.2 billion deal, gaining access to an experimental drug for flu prevention. (Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by Maju Samuel)