US STOCKS-Wall St futures hold firm as Fed rate cut decision nears

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Futures up: Dow 0.09%, S&P 500 0.08%, Nasdaq 0.03%

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US to allow Nvidia H200 chip shipments to China

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Warner Bros fight heats up with $108 bln hostile bid from Paramount

(Updates with prices)

By Johann M Cherian and Pranav Kashyap

Dec 9 (Reuters) -

U.S. stock futures held steady on Tuesday as traders awaited the Federal Reserve's policy decision, while Nvidia (NVDA) shares rose following news that the company had secured approval to resume advanced chip exports to China.

Nvidia (NVDA) climbed 1% in premarket trading after U.S. President Donald Trump said late Monday that he would allow the chip powerhouse to ship its H200 processors, its second-most powerful AI chips, to China, but impose a 25% tariff on those exports.

However, Nvidia's (NVDA) shares pared some gains after a

Financial Times report

said that Beijing was set to curb or block domestic companies from purchasing these chips.

Export controls on U.S. chips capable of powering AI have been a central point of friction in trade talks between Washington and Beijing this year.

"Investors bid up shares in Nvidia (NVDA) after the news broke, implying that they see scope for even higher earnings in the future," said Russ Mould, investment director at AJ Bell.

Advanced Micro Devices (AMD) and Intel (INTC) added about 0.5% each, as Trump said a similar approach would apply to other semiconductor companies.

At 6:59 a.m. ET, Dow E-minis were up 42 points, or 0.09%, S&P 500 E-minis were up 5.75 points, or 0.08% and Nasdaq 100 E-minis were up 7.5 points, or 0.03%.

The spotlight now turns to the Fed's two-day policy meeting, which kicks off Tuesday and ends with a decision on Wednesday. Fresh data show inflation is still stubborn and running above the Fed's 2% target, even as secondary indicators hint the once-red-hot labor market is starting to cool in some sectors.

Traders are now betting on an 89.6% chance of a 25-basis-point cut this week, according to CME's FedWatch Tool, but officials are far from unified. Several policymakers have cautioned that price pressures could easily reaccelerate in the months ahead.

Even so, markets are still penciling in another 50 basis points of easing next year as the Fed seeks to safeguard a softening jobs backdrop.

Investors are awaiting Tuesday's 10 a.m. ET release of the October JOLTS report, which will offer them one last look at labor market data before Wednesday's Fed decision.

The government shutdown and "the subsequent lack of federal reports on jobs, inflation and more has left the Fed to rely on more limited private-sector data to decode these mixed signals, making it harder to know whether the economy needs easing or tightening," said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.

Expectations for Fed rate cuts have underpinned risk-taking, bringing Wall Street's S&P 500 within 1% of a record high, while an index tracking small caps has outperformed the benchmark index this quarter.

Among others, traders kept an eye on a bidding war between Paramount Skydance (PSKY) and Netflix (NFLX) over Warner Bros that has lifted shares of the iconic Hollywood studio by 11% in the past two sessions. Warner Bros shares added 0.5% in Tuesday premarket trading.

Twenty One Capital slumped 26.8% ahead of its first trading day following a blank-check acquisition deal with Cantor Equity Partners. (Reporting by Johann M Cherian in Bengaluru; Editing by Tasim Zahid)