FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 12, 2025. REUTERS/Brendan McDermid/File Photo

By Niket Nishant and Sukriti Gupta

(Reuters) -The S&P 500 and the Nasdaq were on track for small gains at the open on Wednesday as traders assessed measured comments from U.S. Federal Reserve Chair Jerome Powell and looked ahead to crucial economic data due later in the week.

Although the recent numbers point to a resilient economy, commentary from Fed officials has injected some wariness, especially about the labor market, prompting investors to tread carefully.

Powell added to the caution on Tuesday, saying asset prices appeared fairly highly valued. He did, however, stop short of aligning with either camp in the ongoing debate among Fed policymakers, with some pushing for more aggressive cuts to support the jobs market while others urge restraint to avoid reigniting inflation.

Instead, the Fed chair emphasized the delicate balancing act the central bank faces in navigating inflation risks and addressing signs of a softening labor market.

"The market was somewhat caught off guard by Powell's stock market valuation comments and took that as a signal that perhaps the Fed could be concerned about elevated asset prices," said Thomas Hayes, chairman at Great Hill Capital.

"So many managers that sold in April are still behind their benchmarks, so any weakness has to be bought. And I think you're going to see more of that," he said.

At 08:21 a.m. ET, Dow E-minis rose 44 points, or 0.09%, S&P 500 E-minis added 10 points, or 0.15%, and Nasdaq 100 E-minis gained 54.5 points, or 0.22%.

U.S.-listed shares of Chinese companies rose before the bell, led by an 8.4% gain in Alibaba Group, which unveiled a partnership with Nvidia.

"Alibaba is the main Chinese AI ADR play," said Matthew Tuttle, CEO of Tuttle Capital Management. "Normally, I like to buy China when nobody else wants to, but this run feels like it may have some legs."

Investors will also watch for the core personal consumption expenditures data, the Fed's preferred inflation gauge, later this week, which could help shape expectations around further cuts.

Meanwhile, housing market data due on Wednesday could offer insight into consumer demand and builder sentiment, especially since elevated borrowing costs still weigh on affordability.

Markets may also take cues from an upcoming speech by Federal Reserve Bank of San Francisco President Mary Daly for clues on how regional Fed officials are interpreting the latest data and policy signals.

In stocks, Lithium Americas' U.S.-listed shares surged 70.5% in premarket trading after Reuters reported on Tuesday that President Donald Trump's administration was seeking an up to 10% equity stake in the company.

Talks are underway to discuss a government loan exceeding $2.26 billion for the company's Thacker Pass lithium project with General Motors, which rose 2.4%. A report also said UBS had upgraded General Motors to "buy" from "neutral".

ServiceNow added 1.1% after a Morgan Stanley upgrade, while Amazon advanced 1.2% following a report that Wells Fargo had upgraded the company to "overweight" from "equal weight".

Photoshop-maker Adobe fell 1.2% after Morgan Stanley downgraded it to "equal weight" from "overweight".

(Reporting by Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Pooja Desai)