Futures lose steam after Wall St rally; jobs data, Powell hearing on tap

US stock index futures were muted on Monday after the S&P 500 and the Nasdaq's record-closing highs in the prior session, as investors paused at the start of a week packed with key jobs data and Fed Chair Jerome Powell's congressional testimony.

The Nasdaq kicked off March by hitting an intraday all-time high on Friday, also closing at its highest level for the second day, as the artificial intelligence-driven tech rally continues to steal the spotlight on Wall Street.

The S&P 500 has also been on a record-breaking rally, aiding the three major indexes' fourth straight monthly gain through February, with BofA Global Research lifting its year-end target for the benchmark index to 5,400, from 5,000, representing a 5.0 per cent upside from current levels.

All eyes will be on monthly non-farm payrolls, JOLTS and the ADP National Employment reports scheduled throughout the week, for insights into the health of the US labour market, and the Federal Reserve's "Beige Book", a snapshot of the economy's health.

Powell is also set to testify before lawmakers on Wednesday and Thursday, with analysts assuming the Fed chief to stay in wait-and-watch mode on policy after a recent escalation in inflation.

Any negative surprises on the economic front that may significantly delay the onset of rate cuts this year could potentially test the market's undeterred upbeat sentiment. Investors have already pared expectations for how quickly and deeply the Fed will cut rates, as a stronger-than-expected economy risks reigniting inflation if policy eases too soon.

"With January's core PCE inflation data picking up, the path to achieving the 2.0 per cent target may not be so easy, particularly with the labour market data remaining strong. We still expect the first Fed rate cut in June," HSBC analysts said in a note.

Market participants see 73.3 per cent chance of the first Fed rate cut arriving in June and 90.4 per cent odds of that happening in July, as per CME Group's FedWatch tool.

At 5:41 am ET, Dow e-minis were down 75 points, or 0.19 per cent, S&P 500 e-minis were down 5.25 points, or 0.1 per cent, and Nasdaq 100 e-minis were down 11.25 points, or 0.06 per cent.

Among major premarket movers, Nvidia (NVDA.O) gained 1.1 per cent after its market value closed above $2 trillion for the first time on Friday.

Other chipmakers including Micron Technology (MU.O) Arm Holdings, and US-listed shares of Taiwan Semiconductor Manufacturing gained between 1.9 per cent and 4.2 per cent and are set to extend an AI rally from last week.

Macy's (M.N) jumped 15.5 per cent after real-estate-focused investing firm Arkhouse Management and Brigade Capital Management raised their offer for the department store chain.

Cryptocurrency and blockchain-related firms including Coinbase Global (COIN.O) Bitfarms, Riot Platforms (RIOT.O) and Marathon Digital (MARA.O) climbed between 5.0 per cent and 7.3 per cent after bitcoin rallied to a two-year high and broke above $65,000.