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While Cleveland Federal Reserve President Loretta Mester, a
voting member of the rate-setting panel, supported a smaller
rate hike in December, San Francisco Fed President Mary Daly
stressed on Monday the need to be careful to avoid a "painful
downturn".
Traders widely expect the Fed to raise rates by 50 basis points
in December, with some even betting on a 28.9% chance of a
75-bps hike, according to CME Group's FedWatch Tool.
Although several policymakers have signaled a shift to smaller
increases to allow the economy to absorb any monetary policy
shocks, they have also underscored the need for a longer period
of tightening to combat sticky inflation.
Investors will keep a close watch on further remarks by St.
Louis President James Bullard and Kansas City President Esther
George later in the day, and minutes from the Fed's November
meeting for more clarity on the monetary policy tightening path.
Among stocks, Walgreens Boots Alliance Inc rose 1.5% premarket
after Cowen & Co upgraded the drug distributor stock citing its
healthcare services business push.
At 6:57 a.m. ET, Dow e-minis were up 32 points, or 0.09%, S&P
500 e-minis were up 3 points, or 0.08%, and Nasdaq 100 e-minis
were down 4.5 points, or 0.04%.
Tesla Inc shares attempted to recoup some declines, rising 1.5%,
after falling 6.84% in the previous session when the
electric-vehicle maker said it will recall vehicles in the
United States.
Best Buy Co Inc jumped over 7% after forecasting a
smaller-than-expected drop in annual sales ahead of the holiday
season, as steep discounts help soften the blow to electronics
demand from rising prices.
Meanwhile, China strengthened its fight against COVID-19 with
Beijing shutting parks, malls and museums while other cities
resumed mass testing, amid concerns about the economy and fading
hopes of a quick reopening.
U.S.-listed shares of Chinese companies like Pinduoduo Inc,
Bilibili Inc and JD.com Inc slipped between 2.3% and 3%.
Durable sales for October, initial jobless claims and S&P Global
manufacturing and services data on Wednesday will be on
investors watch-list for the holiday-shortened week.
Analysts expect thin trading volumes as markets will be shut on
Thursday for Thanksgiving holiday and will remain open for half
day on Friday.
(Reporting by Ankika Biswas and Shubham Batra in Bengaluru)
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