US STOCKS-Wall St futures muted after market rally as traders await Fed cues

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.)

*

Futures: Dow up 0.01%, S&P 500 down 0.04%, Nasdaq down 0.02%

*

Constellation Brands' (STZ) Q2 sales dip less than expected

*

Trilogy Metals shares soar as US takes strategic stake

(Updates prices)

By Niket Nishant and Sukriti Gupta

Oct 7 (Reuters) - U.S. stock index futures were subdued on Tuesday as investor fatigue set in a day after the S&P 500 and the Nasdaq hit record closing highs, with focus now shifting to a slate of Federal Reserve speakers for policy signals.

Equities have been climbing despite concerns over stretched valuations, and reduced certainty around data after the federal government shutdown entered its seventh day, leaving markets vulnerable to a pullback.

"Stocks have rallied hard off the April lows and skipped past the usual August-September weakness. So if we do see a pullback in the fourth quarter, that could actually be a healthy reset," wrote Bret Kenwell, U.S. investment analyst at eToro.

At 06:49 a.m. ET, Dow E-minis were up 3 points, or 0.01%, S&P 500 E-minis were down 2.75 points, or 0.04%, and Nasdaq 100 E-minis were down 5.5 points, or 0.02%.

Still, the decline may prove temporary as optimism around artificial intelligence and expectations of looser monetary policy persist.

Traders expect the Federal Reserve to cut interest rates by 25 basis points at its meeting later this month, due to a string of reports from last week suggesting labor market softening.

To be sure, these reports typically carry less weight than key official data such as nonfarm payrolls, but are expected to serve as the Fed's best available option to fill the data gap left by the government shutdown.

"The absence of data will keep the Fed on a glide path for rate cuts with an improvement in labor data needed to shake the policymaking committee off its dovish course," said Chris Hodge, head U.S. economist at Natixis.

Investors are also watching the Fed commentary more closely to help with portfolio positioning and some analysts expect the upcoming earnings season will also grab focus, with forecasts and executive commentary likely to carry more weight in shaping expectations.

Fed Vice Chair for Supervision Michelle Bowman, Atlanta Fed President Raphael Bostic, Fed Governor Stephen Miran and Minneapolis Fed President Neel Kashkari are scheduled to speak.

Some analysts say the blackout will sharpen focus on the upcoming earnings season, with forecasts and executive commentary likely to carry more weight in shaping economic expectations.

Among stocks, AMD inched up 4.2% premarket after analyst upgrades, following a 23.7% gain in the previous session. The company bolstered the tech rally after unveiling a chip-supply deal with OpenAI on Monday.

Corona beer maker Constellation Brands (STZ) gained 3.3% after posting a smaller-than-expected drop in second-quarter sales.

Tesla was down 0.6% ahead of an event where it is expected to unveil a more affordable version of its best-selling Model Y SUV.

IBM (IBM) shares advanced 5.4% after the company announced a partnership with AI startup Anthropic.

U.S.-listed shares of Trilogy Metals nearly tripled in value after the White House said it would acquire a 10% stake in the company.

(Reporting by Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath)