* Yellen due to speak at 10:00 a.m. ET
* Q2 GDP grows by 1.1 pct vs prior estimate of 1.2 pct
* Herbalife drops on report of Icahn’s planned stake sale
* Futures down: Dow 43 pts, S&P 0.5 pts, Nasdaq 3.75 pts (Adds details, comments, updates prices)
By Yashaswini Swamynathan
Aug 26 (Reuters) - Wall Street was set to open flat on Friday ahead of Federal Reserve Chair Janet Yellen’s speech, with investors hoping for a clearer picture on the timing of the next interest rate hike.
Yellen speaks before a gathering of global central bankers in Jackson Hole, Wyoming, at 10:00 a.m. ET (1400 GMT).
Her language will be carefully scrutinized, especially after an increasing number Fed policymakers have pushed the case for raising rates by pointing at improving employment and inflation rates.
The markets have been on tenterhooks all of this week in the run-up to Yellen’s speech. Wall Street has dropped about 0.5 percent since Monday, its steepest weekly decline since the Brexit-induced selloff in June.
“I think today it’s going to be more about taking the temperature than a will-they-wont-they scenario,” said Paul Nolte, portfolio manager at Kingsview Asset Management.
“The markets will open lower and later recover. Since we are trading at record highs, a 3-5 percent decline is not the end of the world.”
Dow e-minis were down 43 points, or 0.23 percent at 8:19 a.m. ET, with 18,389 contracts changing hands.
S&P 500 e-minis were down 0.5 points, or 0.02 percent, with 114,614 contracts traded.
Nasdaq 100 e-minis were down 3.75 points, or 0.08 percent, on volume of 16,537 contracts.
The dollar index edged lower as traders refused to completely buy into the recent rhetoric on rates, while prices of gold a safe haven, rose after five days of losses.
Analysts have said it was more plausible that rates would be raised in December than next month, given that inflation rates remain below the Fed’s 2.0-percent target and the upcoming U.S. presidential elections.
Traders have priced in a 21 percent chance of a September rate hike, with the odds rising to 41.4 percent for a move in December, according to CME Group’s FedWatch tool.
A report on Friday showed the U.S. economy grew at a slower pace than previously estimated for the second quarter. However, consumer spending, which makes up more than two-thirds of economic activity, was revised up to show it increased at the fastest rate since the fourth quarter of 2014.
Shares of Herbalife fell 6 percent to $58.25 in premarket trading after a report said Carl Icahn, the nutritional supplement maker’s top shareholder, was looking to sell his stake.
Autodesk rose 3.5 percent after reporting better-than-expected quarterly sales.
GameStop dropped 7.7 percent after quarterly revenue at the world’s largest retailer of video games missed analysts’ estimates. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D‘Souza)