Investing.com -- U.S. stock futures traded marginally higher Tuesday, struggling to continue the recent rally as Federal Reserve policymakers attempted to rein in investors’ hopes for potential future interest rate cuts.

By 06:55 ET (11:55 GMT), the Dow Futures contract was up 25 points, or 0.1%, S&P 500 Futures traded 5 points, or 0.1%, higher and Nasdaq 100 Futures climbed 15 points, or 0.1%.

The main Wall Street indices come off another positive session on Monday, with the broad-based S&P 500 closing 0.5% higher, the tech heavy Nasdaq Composite gaining 0.6% and the blue chip Dow Jones Industrial Average just edging higher.

Fed officials rein in rate cut expectations

Equities have been on the tear after the Federal Reserve indicated it was done raising interest rates and will likely pivot to cuts next year, signaling the likelihood of three cuts of 25 basis points during 2024.

However, gains have been more limited of late as Fed policymakers have attempted to dilute the enthusiasm generated by the dovish nature of the Fed last meeting.

Cleveland Fed President Loretta Mester pushed back against the notion that borrowing costs will soon be lowered, telling the Financial Times that markets are "a little bit ahead" in their projections for a reduction as early as March.

She added that traders jumped too quickly to the "end part" that the Fed is "going to normalize quickly," the FT reported.

This followed similar comments from Chicago Fed President Austan Goolsbee on Monday and New York Fed President John Williams late last week.

Goolsbee returns to the public stage later Tuesday, along with Atlanta Fed President Raphael Bostic.

A light week for economic data and earnings continues Tuesday, with preliminary building permits data for November and housing starts.

Google to settle lawsuit for $700 million

In corporate news, FedEx (NYSE: FDX) is due to report its November quarter results after the closing bell.

Elsewhere, Alphabet's (NASDAQ: GOOGL) Google has agreed to pay $700 million to settle a lawsuit brought against the search giant by U.S. states and consumers over anticompetitive practices at its Play app store on Android devices, court filings showed on Monday.

Apple (NASDAQ: AAPL) said it would pause sales of its Series 9 and Ultra 2 smartwatches in the United States from this week, as it deals with a patent dispute over the technology that enables the blood oxygen feature on the devices.

Oil prices slip on Red Sea task force

Oil prices slipped slightly Tuesday, handing back some of the previous session’s gains, as the U.S. announced plans to expand a naval task force to protect shipping through the Red Sea.

By 06:55 ET, the U.S. crude futures traded 0.1% lower t0 $72.81 a barrel, while the Brent contract traded 0.1% lower to $77.91 a barrel.

Both benchmarks rose more than 1% on Monday on concerns about shippers diverting vessels away from the Red Sea, causing supply disruptions, in the face of an increase of assaults by Houthi militants in Yemen.

Additionally, gold futures traded largely unchanged at $2,040.55/oz, while EUR/USD traded 0.2% higher at 1.0938.