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Futures up: Dow 0.07%, S&P 500 0.26%, Nasdaq 0.45%

Dec 23 (Reuters) - U.S. stock index futures inched up on

Monday as a last-minute government funding bill averted a

shutdown, while optimism about cooling inflation started the

holiday-shortened week on a positive note.

The U.S. Congress passed spending legislation early on

Saturday, minutes after the funding had 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 presidential election in

November, Wall Street's rally hit a bump this month, especially

after the Federal Reserve forecast just two 25-basis-point cuts

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.

"Last week's (Fed) meeting reinforced our baseline view that

a skip at the January meeting could turn into an extended pause

in 2025," economists at Deutsche Bank said in a note.

However, a cooler-than-expected inflation report on Friday

eased some worries about interest-rate cuts next year, helping

the three main U.S. stock indexes to 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.

At 05:18 a.m., Dow E-minis were up 31 points, or

0.07%, the S&P 500 E-minis were up 15.5 points or 0.26%,

and the Nasdaq 100 E-minis were up 97.75 points, or

0.45%.

Qualcomm's ( QCOM ) shares rose 3% 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 new trial, fell about 3.3%.

Shares of Rumble jumped 47.3% after the

video-sharing platform said it has received a strategic

investment of $775 million from cryptocurrency firm Tether.

Apple ( AAPL ), the world's most valuable company, ticked up

0.5%, in line with most megacap and growth firms, taking its

market capitalization just $115 billion short of $4 trillion.

Trading volumes are expected to thin, with U.S. stock

markets closing early on Tuesday and shut for Christmas on

Wednesday.

But markets will enter a historically strong period for U.S.

stocks next week. 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 has jumped 24.3% so far in 2024, the Dow

has climbed 13.7% and the Nasdaq has surged

30.4%.