A man walks along Wall Street in New York September 18, 2008.
A man walks along Wall Street in New York September 18, 2008. Reuters / ERIC THAYER

U.S. stock indexes were set to open lower on Monday amid concerns about higher interest rates, while comments from a Russian official eased worries about a possible invasion on Ukraine.

Futures took a hit after St. Louis Federal Reserve President James Bullard in an interview with CNBC stuck to his call for a 100 basis point rate hike by June, saying the Fed needs to reassure to the public that it will defend its 2% inflation target.

Traders priced in a 67% chance for a 50 basis point hike in March following Bullard's comments, from 56% previously, according to CME Group's Fedwatch tool.

Major lenders traded mixed, with Wells Fargo & Co up 0.3%, while J.P. Morgan lost 0.5%.

Futures bounced back from sharp losses earlier, as Russian Foreign Minister Sergei Lavrov suggested to President Vladimir Putin that Moscow continue along the diplomatic path in its efforts to extract security guarantees from the West, as tensions soar over Ukraine.

The comments appeared to signal a reduced likelihood of imminent Russian military action after repeated warnings from the United States that Russia could attack Ukraine at any time.

"It's alleviated some of the concerns, given the market a little bit of hope that maybe this issue with Ukraine could be resolved diplomatically, and that is what has turned futures around," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

The CBOE Market Volatility index, also known as Wall Street's fear gauge, was still up to its highest level in nearly three weeks.

"There is still a lot of interest in owning U.S. stocks especially because they've come down so much," Pavlik said.

The major indexes had a rocky start to 2022, with the tech-heavy Nasdaq down 11.8% so far this year as worsening price pressures ramped up traders' bets for a half-point rate hike at Fed's March meeting.

At 08:43 a.m. ET, Dow e-minis were down 18 points, or 0.05%, S&P 500 e-minis were down 7.5 points, or 0.17%, and Nasdaq 100 e-minis were down 47.5 points, or 0.33%.

Megacap growth firms including Meta Platforms Inc, Apple Inc, Microsoft Corp, Alphabet Inc and Tesla Inc slipped between 0.1% and 0.7%.

Market participants now await producer prices data for January and minutes from the U.S. central bank's most recent monetary policy meeting later this week.

"We will scan the minutes for clues as to whether this number is logical or not," said Charalambos Pissouros, head of research at JFD Group.

"Anything confirming that the Fed is willing to proceed as aggressive as the current market pricing suggests could support the U.S. dollar, and perhaps result in further retreat in equities."

Meanwhile, fourth-quarter earnings season is in full swing, with profits for the S&P 500 companies now expected to grow 31% year-over-year.

Goodyear Tire & Rubber Co rose 3.3% after J.P. Morgan upgraded the tire manufacturer's stock to "overweight" from "neutral".