Updates with prices before the bell, adds analyst comments

By Pranav Kashyap and Twesha Dikshit

Jan 30 (Reuters) - U.S. stocks were set to open lower on Friday after President Donald Trump nominated former Federal Reserve Governor Kevin Warsh to head the U.S. central bank, as traders mulled over the monetary policy path under the new Fed leadership.

Investors see Warsh as someone who would support lower interest rates but would stop well short of a more aggressive monetary policy easing associated with some of the other potential nominees. His appointment needs Senate confirmation.

Meanwhile, producer prices increased more than expected in December, suggesting inflation could pick up in the months ahead.

"There is a general sense of hawkishness in the market following the emergence of Kevin Warsh's name. He is viewed as less dovish than many of the other candidates and is expected to favor fewer rate cuts," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"From a policy perspective, the composition of the Fed's leadership should not, in theory, override its mandate."

Investors continued to bet on at least two 25 basis-points interest-rate cuts by the end of 2026. The central bank held rates steady earlier this week, pausing an easing cycle which has supported U.S. stocks.

Futures slid overnight, while the dollar and Treasury yields climbed on Thursday following media reports that the White House was preparing for Trump to nominate Warsh as the next Fed chair.

At 08:41 a.m., Dow E-minis YMcv1 were down 270 points, or 0.55%,S&P 500 E-minis EScv1 were down 38.75 points, or 0.55%and Nasdaq 100 E-minis NQcv1 were down 192.75 points, or 0.74%.

Futures tracking the small-cap Russell 2000 index RTYcv1 .RUT, which is more sensitive to interest rates, fell 1.1%.

The CBOE volatility index - Wall Street's "fear gauge" - gained 1.16 points to 18.04 points.

SMALL-CAPS OUTPERFORM IN JANUARY

Indexes were whipsawed in the previous session with the Nasdaq falling more than 2%, before finishing 0.7% lower. The S&P closed down 0.1% after falling over 1%.

Microsoft MSFT.O logged its worst day since March 2020 after its cloud revenue failed to impress, triggering a broad tech selloff on Wall Street on Thursday.

Its shares rose 0.6% in premarket trading.

Meanwhile, Apple AAPL.O slipped 0.2%. The iPhone maker forecast higher-than-expected revenue growth of up to 16% for the March quarter, but warned that rising memory chip prices had started to pressure profitability.

Wall Street has largely rebounded from bouts of selling pressure stemming from Trump's plans to acquire Greenland and patchy spell of fourth-quarter earnings.

Of late, signs of AI trade getting crowded have sparked a rotation into small‑caps and other overlooked corners of the market.

The Russell 2000 index of small caps stocks .RUT is on track to end the month up nearly 7%, while the S&P 600 .SPCY is headed for a gain of more than 6%. That compares with rises of a little more than 1.8% each for the S&P 500 and the Nasdaq.

The Dow, meanwhile, is poised to notch a ninth straight monthly advance, its longest winning streak since 2018.

Of the 133 companies in the S&P 500 that have reported so far, about 74% beat analysts' expectations, LSEG data on Thursday showed.

Verizon VZ.N shares gained 5.2% after the wireless carrier forecast upbeat annual profit. American Express AXP.N forecast annual profit largely above Wall Street expectations, but its shares slipped 2.2%.

U.S.-listed gold and silver miners tumbled following a more than 5% drop in bullion prices and an 11% slide in the white metal.

(Reporting by Pranav Kashyap and Twesha Dikshit in Bengaluru; Editing by Shinjini Ganguli and Arun Koyyur)

((pranav.kashyap@tr.com; +919886482111;))