(Reuters) -The S&P 500 and the Nasdaq were set to open lower on Tuesday as concerns around elevated technology valuations resurfaced, while markets closely watched progress toward the end of the longest government shutdown in U.S. history.

Technology and AI shares rebounded in the previous session from last week's steep losses, on expectations that the government would reopen as soon as this week, with the prolonged closure weighing on the economy and contributing to a data blackout for the Federal Reserve and traders alike.

The Nasdaq posted its largest daily gain since May 27 and the S&P 500 recorded its biggest one-day percentage rise since mid October on Monday.

Dampening sentiment on Tuesday, a weekly update of ADP's preliminary payroll figures showed that private employers shed an average of 11,250 jobs a week for the four weeks ended October 25.

"The ADP data misses a significant fraction of the overall labor market and (does) not provide much of a window into the health," said Jamie Cox, managing partner for Harris Financial Group.

"There was such a large relief rally yesterday that markets are just taking a breather."

At 8:39 a.m. ET, Dow E-minis were up 41 points, or 0.09%, S&P 500 E-minis were down 14 points, or 0.2% and Nasdaq 100 E-minis were down 108 points, or 0.42%.

Worries around AI-related companies that have been the main drivers of the bull market this year persisted as traders evaluated returns from technology and circular expenditure within the sector.

Nvidia shares dropped 1.8% in premarket trading after Japanese technology investor SoftBank Group disclosed that it had offloaded the rest of its shares in the AI bellwether for $5.83 billion.

Nvidia-backed CoreWeave's shares dropped 8.3% after the cloud computing firm trimmed its annual revenue forecast. The company's stock has more than doubled since going public earlier this year.

As the third quarter earnings season approaches its conclusion, profit growth at S&P 500 companies is expected to increase 16.8% year-on-year compared to initial estimates of 8%, according to LSEG data.

FEDERAL RE-OPENING AWAITED

The U.S. Senate on Monday approved a compromise that would end the shutdown that has disrupted food benefits for millions, left federal workers unpaid and snarled air traffic.

The bill will head next to the House of Representatives for approval before being sent to U.S. President Donald Trump for his signature, with betting markets like Polymarket fully pricing in a reopening this week.

"The shutdown will be substantively over by Thursday at the latest, and you will continue to see follow-through from Monday's rally once the holiday has concluded," Cox added.

Meanwhile, Trump said the U.S. faced an economic and national security disaster if the Supreme Court ruled against his use of an emergency powers law to impose sweeping tariffs.

Among other moves, Rocket Lab shares jumped 9.9% after the space company posted record third-quarter revenue.

Quantum computing firm Rigetti Computing reported third-quarter revenue below estimates, sending its shares falling 4.3%.

Paramount Skydance shares gained 5.3% after the newly merged media firm announced more cost cuts and plans to invest $1.5 billion in its streaming and studio divisions.

U.S. bond markets were closed for a public holiday.

(Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by Maju Samuel)

By Twesha Dikshit and Purvi Agarwal