Updates prices, adds analyst comment and context

By Sruthi Shankar and Shashwat Chauhan

Dec 24 (Reuters) - U.S. stock index futures were marginally lower in shortened Christmas Eve trading on Wednesday, as traders wait to see whether stocks can extend record gains in a seasonally strong stretch for markets.

The benchmark S&P 500 .SPX hit a closing record high on Tuesday, lifted by megacap technology stocks, while a run of data painted a mixed picture of the U.S. economy and kept expectations for monetary easing next year largely intact.

The U.S. economy grew at its fastest pace in two years in the third quarter, according to government data on Tuesday after a 43-day federal government shutdown delayed the report. However, worsening consumer confidence in December and a flat reading on November factory production tempered the outlook.

Traders are still pricing in two 25-basis-points interest rate cuts by the end of 2026, as per LSEG data, although they pared back odds of such a move in January to 13% from 18% before the data.

U.S. weekly jobless claims data is due at 8:30 a.m. ET.

Recent gains in U.S. stocks have spurred hopes of a "Santa Claus rally", a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader's Almanac. The period begins on Wednesday and runs through January 5.

"The recent slump in the VIX augurs well for a bounce, given that previous instances of sharp falls in volatility have delivered a commendable 0.8% bounce in the S&P 500 over the next week," said Chris Beauchamp, chief market analyst at IG.

Wall Street's "fear gauge" .VIX was last hovering near its lowest since December 2024.

Trading volumes are likely to stay below normal, with U.S. stock markets set to close at 1 p.m. ET (1800 GMT) on Wednesday and remain shut on Thursday for Christmas.

At 7:04 a.m. ET, Dow E-minis YMcv1 were down 35 points, or 0.07%, S&P 500 E-minis EScv1 were down 3.5 points, or 0.05% and Nasdaq 100 E-minis NQcv1 were down 17.25 points, or 0.07%.

U.S. equities swung sharply this year as tariff-related headlines, concerns about high tech valuations, and rapidly shifting interest-rate expectations boosted volatility.

Still, the bull market that began in October 2022 stayed intact as optimism around AI, interest-rate cuts and a resilient economy supported sentiment with all three main cash indexes set for their third straight yearly gain.

In the year ahead, global markets will be closely watching who might replace Fed Chair Jerome Powell, after President Trump said Tuesday that anyone who disagrees with him would "never be the Fed Chairman."

Among single stocks, Nike NKE.N climbed 2% in premarket trading after Apple CEO Tim Cook, the sportswear giant's lead independent director, bought about $3 million of shares.

Intel INTC.O fell 4.6% following a report that said Nvidia has halted tests to manufacture on Intel's 18A chipmaking node after initial tests.

Dynavax Technologies DVAX.O surged 37.9% after French drugmaker Sanofi SASY.PA said it would buy the U.S. vaccines company for around $2.2 billion (1.9 billion euros).

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Tasim Zahid)

((sruthi.shankar@thomsonreuters.com;))