Dec 23 (Reuters) - Wall Street's main indexes were on track for a muted start on Monday, as a stopgap government funding bill averted a partial shutdown and investors contended with a slower pace of rate cuts from the U.S. central bank next year.
The United States Congress passed spending legislation early on Saturday, minutes after the funding expired, which could have disrupted everything from law enforcement to national parks ahead of the busy Christmas travel season.
After a solid run since the November presidential election, Wall Street's rally hit a bump this month, especially after the U.S. Federal Reserve forecast just two 25-basis-point rate reductions for 2025 - down from its September view of four cuts - and raised its annual inflation outlook, a sign that the world's largest economy was in strong health.
However, a cooler-than-expected inflation report on Friday eased some worries about rate cuts next year, helping the three main U.S. stock indexes bounce back.
Money markets expect roughly two 25-bps reductions in 2025, which would bring the benchmark rate to a range of 3.75% to 4.0%, from about a 3.50 to 3.75% range two weeks ago.
"We would rather have the Fed cut fewer times in a strong economy, than have to cut more times in a weakening economy," said Art Hogan, chief market strategist, B Riley Wealth.
In economic data, a measure of consumer confidence for December is due at 10 a.m. ET.
At 08:44 am, Dow E-minis were down 225 points, or 0.52%, S&P 500 E-minis were down 0.25%, or 14.75 points, and Nasdaq 100 E-minis were down 3.25 points, or 0.02%.
"It's a Monday with very few catalysts to drive (broad market) sentiment, and we're going to have low volume, likely volatile trading as we work our way out of this year," said Hogan.
Trading volumes are expected to thin, with U.S. stock markets closing early on Tuesday and shut for Christmas on Wednesday.
Markets are also entering a historically strong period for U.S. stocks. Since 1969, the last five trading days of the year, combined with the first two of the following year, have yielded an average S&P 500 gain of 1.3% - a period known as the "Santa Claus Rally", according to the Stock Trader's Almanac.
The S&P 500 (.SPX), opens new tab has jumped 24.3% so far in 2024, the Dow (.DJI), opens new tab has climbed 13.7% and the Nasdaq (.IXIC), opens new tab has surged 30.4%.
In company news, Qualcomm's (QCOM.O), opens new tab shares rose 2% in premarket trading after a jury found its central processors are properly licensed under an agreement with UK-based Arm Holdings . Shares of Arm, which has vowed to seek a fresh trial, fell about 2.7%.
Shares of Rumble (RUM.O), opens new tab jumped 40% after the video-sharing platform said it has received a strategic investment of $775 million from cryptocurrency firm Tether.
Among megacaps, Apple's (AAPL.O), opens new tab market capitalization stood at $3.86 trillion as the world's most valuable company inched closer to a $4-trillion milestone.
Eli Lilly (LLY.N), opens new tab gained 1.5% after the U.S. Food and Drug Administration approved the drugmaker's weight-loss treatment, Zepbound, for obstructive sleep apnea. Shares of sleep apnea device makers Resmed (RMD.N), opens new tab and Inspire Medical (INSP.N), opens new tab fell 5% and 4%, respectively.
Reporting by Medha Singh and Purvi Agarwal in Bengaluru; Editing by Pooja Desai
