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Markets to close at 1 pm ET in curtailed trading session

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American Airlines ( AAL ) briefly grounds flights due to technical

issue

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Futures: Dow off 0.05%, S&P 500 up 0.13%, Nasdaq up 0.24%

(Updates before market open)

By Medha Singh and Purvi Agarwal

Dec 24 (Reuters) -

Wall Street's main indexes were on track for a subdued open

in a shortened trading session on Tuesday as U.S. equity markets

enter a historically strong period before rounding off their

second consecutive year of gains.

With few major catalysts, thin trading volumes expected

in the final days of the year raise the prospect of choppy

trading.

Stock markets will shut at 1:00 p.m. ET on Tuesday and will

be closed for Christmas on Wednesday.

At 08:32 a.m. ET, Dow E-minis were down 22 points,

or 0.05%, S&P 500 E-minis were up 8 points, or 0.13%,

and Nasdaq 100 E-minis were up 53.25 points, or 0.24%.

The S&P 500 and the Nasdaq notched two consecutive

sessions of gains on Monday, helped by advances in a handful of

megacap and growth companies.

"Because they ended higher yesterday, investors are

breathing a sigh of relief that maybe the hawkish rate cut last

week combined with the softer PCE reading indicate that

inflation is not that big of a re-emerging threat," said Sam

Stovall, chief investment strategist of CFRA Research.

"As a result, maybe this market will end up creeping

higher between now and the end of the year."

After a stellar run to record highs following the November

election that sparked hopes of pro-business policies under U.S.

President-elect Donald Trump, Wall Street's rally hit a bump

this month as investors grappled with the prospect of higher

interest rates in 2025.

The U.S. Federal Reserve eased borrowing costs for the third

time this year last Wednesday, but signaled only two more

25-basis-point reductions next year, down from its September

projection of four cuts, as policymakers weigh the possibility

of Trump's policies stoking inflation.

Traders expect the Fed to leave rates in the range of 4% to

4.25% by the end of 2025, from between 3.75% and 4% about 10

days ago, according to CME's FedWatch tool.

Markets are currently in a historically strong period called

the "Santa Claus rally". The S&P 500 on average has gained 1.3%

in the last five days of December and first two days of January,

according to data from the Stock Trader's Almanac going back to

1969.

However, market participants are questioning if U.S. stocks'

climb to new record highs will be attainable in the coming days,

amid concerns about sky-high valuations and the overall health

of the market.

The benchmark S&P 500 fell about 1% in December but

the equal-weight S&P 500, a proxy for the average index

stock, is down 5.8%.

Among individual stocks, NeueHealth ( NEUE ) soared 64.7% in

premarket trading after the healthcare provider said New

Enterprise Associates, its largest shareholder, and a group of

existing investors will take the company private in a $1.3

billion deal.

American Airlines' ( AAL ) shares were marginally down after

the carrier briefly grounded all its flights in the United

States due to an unspecified technical issue, disrupting the

travel plans of thousands of passengers set to fly out for

Christmas Eve.