A sombre Nadal announced his withdrawal a couple hours before he was scheduled to take the court at Indian Wells Tennis Garden.
"I warmed up today, and I felt that my knee was not good to compete at the level I needed to compete in [the] semifinals", Nadal said.
Nadal's knee appeared to flare up in his quarter-final win over Khachanov on Friday, where he twice received treatment from his trainer, with the Spaniard stressing after the match he would need to assess the injury ahead of the match on Saturday. It was obvious that Nadal's movement was hampered. "I feel fortunate for all the things I've done in my life and the world of tennis". He was forced to quit two sets into his semifinal against Juan Martin del Potro.
"It's been a tough one; he was a tough opponent and I didn't have the best start but I managed to come back and fight", he said.
"I don't think those matches matter that much, to be honest", Federer, who is yet to drop a set at the tournament.
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The 24-year-old, now ranked 23 in the world, won 84% of his first-serve points to triumph 6-3 6-3 in an hour and 14 minutes. Svitolina beat the Czech Republic's Marketa Vondrousova 4-6, 6-4, 6-4 in the only other women's singles match of the day.
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Khachanov, ranked 13th in the world, saved three set points at 5-4 as he fought to force a tie-break.
Even with all of his injuries, Nadal indicated he has no intention of giving up playing on hard courts, the surface for two of the four Grand Slam events. "Of course my goal and my idea is to be ready for tomorrow", Nadal said.
Federer trails Nadal in their head-to-head series, 23-15, but he's won their last five meetings and that adds a nice twist to the tale.
Federer received a walkover to the final, where he will play either Austria's Dominic Thiem or Milos Raonic of Canada.