Investors Await Key Fed Insights as U.S. Stock Market Shows Mixed Signals

U.S. stock futures were largely unchanged on Monday as investors await comments from Federal Reserve officials and economic data to gauge interest rates and economic health. The Fed's recent rate cut has buoyed major indexes, but high valuations and upcoming data keep investor sentiment cautious.

U.S. stock index futures were muted on Monday, as investors awaited comments from a bunch of policymakers and data to gauge the outlook for interest rates and the economy's health, days after the Federal Reserve commenced its easing cycle. 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 7:19 a.m. ET, Dow E-minis were up 17 points, or 0.04%, S&P 500 E-minis were up 6 points, or 0.10%, and Nasdaq 100 E-minis were up 34.75 points, or 0.17%.

Data on Friday showed equity fund managers raised their net long positions in S&P 500 futures contracts in the week ended Sept. 17. A host of Fed officials are set to speak this week, including Chair Jerome Powell on Thursday, as markets await their outlook for monetary policy and insights on the state of the economy, which most analysts believe is robust.

On Friday, Governor Christopher Waller flagged that upcoming inflation data could undershoot the Fed's 2% target. On the other hand, Michelle Bowman, who voted for a 25 basis point reduction at the central bank's previous meeting, said price pressures were still persistent. On the day, Minneapolis President Neel Kashkari supported the central bank's latest move and added that rates could be trimmed by another half-a-percentage point by year-end.

Traders are pricing in November's rate cut to be a coin toss, as per the CME Group's FedWatch tool, with odds slightly favoring a 25 basis point reduction. Remarks from Fed presidents Raphael Bostic and Austan Goolsbee are also due later in the day.

'The Fed made a forceful case at its September meeting that the U.S. economy remains on solid ground, with few signs of an impending recession. However, markets are likely to remain sensitive to weak economic releases,' analysts at UBS said. 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 rose 3.4% in premarket trading after a report showed Apollo offered to make an investment of as much as $5 billion in the chipmaker. General Motors slipped 2.4% after a report said Bernstein had downgraded the carmaker's stock to 'market perform' from 'outperform'.

(With inputs from agencies.)