By Ankika Biswas and Shashwat Chauhan - Major U.S. stock indexes were set for a higher open on Wednesday as easing Treasury yields boosted megacaps, while investors awaited developments on a U.S. funding bill and inflation data this week to gauge the Federal Reserve's policy outlook.

A pullback in the two-year and 10-year Treasury yields provided some relief to megacap growth stocks including Apple, Microsoft, Tesla , Nvidia and Alphabet, up between 0.4% and 0.8%, in premarket trading.

At 8:43 a.m. ET, Dow e-minis were up 94 points, or 0.28%, S&P 500 e-minis were up 15.5 points, or 0.36%, and Nasdaq 100 e-minis were up 50.75 points, or 0.34%.

"When the market declines rather rapidly and it has for quite some time, bargain hunters will step in and periodically buy things," said Randy Frederick, managing director of trading and derivatives for Charles Schwab.

All the three major stock indexes closed over 1% lower on Tuesday as 10-year Treasury yields held their multi-year highs, with investors wrestling with prospects for a long period of high interest rates and an economic fallout.

However, markets are bracing for some more volatility, with policymakers projecting elevated rates until the end of 2024, boosting Treasury yields, which are sensitive to interest rate expectations and seen as risk-free due to government backing.

"The longer-term momentum is still positive even though we are in a period of short-term pullback and that's driven by a lot of things- high interest rates, high crude oil prices and the prospect of a government shutdown at the end of this week," Frederick added.

The S&P 500 and the Nasdaq are set for their worst monthly showing so far this year, while all the three indexes including the Dow are eyeing their first quarterly decline in 2023.

Data showed orders for long-lasting U.S. manufactured goods unexpectedly rose in August and there were signs that business spending on equipment retained some momentum after faltering early in the third quarter.

For the rest of the week, investors will monitor second-quarter GDP and the monthly personal consumption expenditures price index, along with Federal Reserve Chair Jerome Powell's remarks.

Traders' bets on the benchmark rate remaining unchanged in November and December stood around 80% and 64%, respectively, according to CME's FedWatch tool. Meanwhile, a 25-basis-point rate cut is being priced in as early as March, growing to over 33% in June and July.

On the political front, the U.S. Senate on Tuesday took a step forward on a bipartisan bill to stop a government shutdown on Sunday, while the House sought to push ahead with a Republican-backed measure. The current partisan gridlock has begun to darken Wall Street's view of U.S. government credit.

Among single stocks, Rivian Automotive gained 1.6% on plans to use subscription models for monetizing various features in cars.

Costco dipped 1.8% even though the wholesale retailer reported better-than-expected fourth-quarter results, with analysts pinning the fall on broader market concerns.

(Reporting by Ankika Biswas, Shashwat Chauhan and Amruta Khandekar in Bengaluru; Editing by Maju Samuel)