US STOCKS-Wall St to open lower as strong retail sales dash early rate-cut hopes

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Tesla cuts Model Y prices in Germany after China price cuts

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Spirit Airlines dips after US judge blocks merger with JetBlue

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China ADRs slide after weak economic data hammers local shares

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US retail sales beat expectations in December

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Futures off: Dow 0.49%, S&P 0.66%, Nasdaq 0.92%

(Updated at 8:48 a.m. ET/1348 GMT)

By Johann M Cherian and Ankika Biswas

Jan 17 (Reuters) -

Wall Street's main indexes were on track for a lower open on Wednesday, after data reflecting a higher-than-anticipated rise in U.S. retail sales in December tempered expectations of the Federal Reserve delivering early interest-rate cuts this year.

A Commerce Department

report

showed December retail sales rose by 0.6% on a monthly basis, compared with the 0.4% increase economists polled by Reuters had expected.

Traders' expectations of a 25-basis-point rate cut by the Fed in March dipped to 55%, from around 60% before the data was released, as per the CME Group's FedWatch Tool.

The yield on the benchmark 10-year U.S. Treasury notes rose after the data was out, to over 4%, weighing on megacaps such as Alphabet, Amazon.com and Meta, which were down between 0.6% and 0.9% in premarket trading.

"For the Fed, the numbers cast further doubts on the likelihood of a first interest-rate cut being delivered in March, the chances of which are diminishing with each data release we get," said Stuart Cole, chief economist at Equiti Capital in London.

Halfway into the first month of 2024, Wall Street's near-14% rally in the last two months of 2023 is losing steam as U.S. central bankers continue to downplay market expectations for a quick start to the monetary-policy-easing cycle, while data on the economy's performance appears mixed.

Other major central-bank policymakers have also actively snubbed such expectations, weighing on the global risk appetite.

The CBOE Market Volatility Index, a market fear gauge, rose to an over two-month high of 14.80 points during the day.

Also on tap are December industrial production data, due before market open, and the release of the "Beige Book", a snapshot of the U.S. economy, at 2:00 p.m. ET.

A number of Fed officials are expected to speak on Wednesday, and their remarks will be parsed for clues on the timing of the rate cuts.

Meanwhile, Tesla lost 2.6% after the electric-vehicle maker slashed the prices of its Model Y cars in Germany, a week after reducing prices for some China models.

After reporting fourth-quarter earnings on Tuesday, CEOs of investment banking giants expressed optimism about a resurgence in capital markets on an improving U.S. economy and deals pipeline, but also warned of risks that could disrupt the nascent recovery.

At 8:48 a.m. ET, Dow e-minis were down 185 points, or 0.49%, S&P 500 e-minis were down 31.75 points, or 0.66%, and Nasdaq 100 e-minis were down 155.75 points, or 0.92%.

Futures tracking the small-cap Russell 2000 index also dropped 1.6%, after the index hit a more than one-month low on Tuesday.

On the fourth-quarter earnings front,

Citizens Financial

lost 2.2%, after warning that its net interest income could fall this year.

U.S.-listed shares of Chinese firms such as Alibaba , Xpeng and Bilibili dropped between 2.9% and 8.1%, after China data showed the local economy's recovery appeared shakier than expected.

Spirit Airlines slid 15.9%, following a plunge in the previous session, after a U.S. judge blocked JetBlue from acquiring the carrier.

Ford Motor lost 2.4%, on a report that UBS had downgraded the stock. (Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Pooja Desai)