By Johann M Cherian and Purvi Agarwal
(Reuters) -Wall Street was set to open slightly higher as investors shifted their focus to comments from Federal reserve policymakers and economic data lined up through the week, following the central bank's decision to commence policy easing.
The Fed's pivotal move on monetary policy in the previous week propped up Wall Street's main indexes for monthly gains, bucking a historical trend where September has been a weak month for equities on average.
Having rallied for much of the year, the S&P 500 is a whisker away from an all-time high and the blue-chip Dow closed at a record high on Friday. However, with the benchmark index's valuations above its long-term average, some caution prevails about further bids.
At 8:43 a.m. ET, Dow E-minis were up 36 points, or 0.08%, S&P 500 E-minis were up 11.25 points, or 0.20% and Nasdaq 100 E-minis were up 65 points, or 0.32%.
Data on Friday showed equity fund managers raised their net long positions in S&P 500 futures contracts in the week ended Sept. 17.
Russell 2000 futures, tracking small caps that do well in a low interest rate environment, outperformed with a 0.42% rise.
Comments from a number of policymakers were the main focus on the day as investors scoured for clues on why the central bank kicked off its easing cycle with an outsized 50 basis points cut.
Atlanta Fed President Raphael Bostic, a Federal Open Market Committee voting member this year, said inflation and unemployment were nearing normal rates, suggesting an openness to a quick pace of upcoming cuts.
Separately, a report showed Minneapolis Fed President Neel Kashkari said he is eying around a half percentage points' worth of rate cuts by year-end.
Trader bets, as per the CME Group's (NASDAQ:CME) FedWatch tool, initially favored a larger Fed move at its upcoming November meeting, after Governor Christopher Waller on Friday flagged that upcoming inflation data could undershoot the Fed's 2% target.
However, the bets now appear to be a coin toss, with markets expecting a total of 75 bps reduction by year-end as per LSEG data.
"The market is anticipating a lot more than the Fed is going to provide and for that reason, the market's going to be volatile," said Phil Blancato, chief executive officer of Ladenburg Thalmann Asset Management.
"It's a little bit of a pause considering the exuberance of last week. There's nothing economic right now that's spooking the market other than the Fed going a little further than anyone expected."
On the data front, a preliminary survey on September manufacturing and services activity is on tap at 9:45 a.m. ET. But the spotlight will be on Friday's personal consumption expenditure figure for the month of August - the Fed's preferred inflation gauge.
Among top movers, Intel (NASDAQ:INTC) rose 0.70% in premarket trading after a report showed Apollo offered to make an investment of as much as $5 billion in the chipmaker.
General Motors (NYSE:GM) slipped 2.8% after Bernstein downgraded the carmaker's stock to "market perform" from "outperform".