US STOCKS-Wall St eyes subdued open after selloff on Fed worries

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GameStop rises on report of layoffs

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Georgia U.S. Senate runoff election in tight spot

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Futures: Dow down 0.09%, S&P off 0.05%, Nasdaq up 0.04%

(Adds analyst comment; updates prices throughout)

By Devik Jain and Ankika Biswas

Dec 6 (Reuters) - U.S. stock indexes were set for a subdued open on Tuesday following a selloff on fears the Federal Reserve could persist with interest rate hikes for longer, while focus shifted to Georgia runoff election that could decide the fate of the Senate.

All three major indexes closed at their lowest levels in nearly a week on Monday after upbeat services sector data offered more evidence of strength in the U.S. economy despite a series of big interest rate hikes.

"Investors are struggling between the current picture, continued rising rates even if it's at a slower clip, and looking forward to a point where the rate increases trail off and end," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

"It's the recession fear that a lot of investors have ... the concern is that profits begin to drop more meaningfully in the recession."

Money market bets are pointing to a 91% chance that the U.S. central bank might raise rates by 50 basis points at its Dec. 13-14 policy meeting, with rates expected to peak at 5.005% in May 2023, up from 4.92% estimated on Monday before the PMI data.

Concerns about steeper increase in borrowing costs have boosted dollar, while weighing on equities and bond markets this year, with the S&P 500 down 16.1% and the widely followed part of the Treasury yield curve deeply inverted - a harbinger of recession.

As of Dec. 2, analysts expected S&P 500 companies to report a drop of 0.6% in fourth-quarter earnings after posting a 4.4% rise in the third quarter, according to Refinitiv IBES data.

At 8:07 a.m. ET, Dow e-minis were down 31 points, or 0.09%, S&P 500 e-minis were down 2 points, or 0.05%, and Nasdaq 100 e-minis were up 4.75 points, or 0.04%.

Meanwhile, a Tuesday runoff election in Georgia between Democratic U.S. Senator Raphael Warnock and Republican former football star Herschel Walker will determine whether President Joe Biden's party can expand its razor-thin majority in the Senate.

A Warnock victory would give his party an outright majority of 51 seats in the upper chamber and a measure of sway over committees and judicial appointments. A Walker win would boost Republicans' chances of blocking Biden's agenda.

A split government, with a Democrat in the White House, has historically been favorable for stock markets as it paves the way for partisan standoffs on contentious policy changes such as the federal debt limit.

Among individual stocks, GameStop Corp rose 1.6% in premarket trading following a media report on layoffs.

General Electric Co gained 1.5% after Oppenheimer upgraded the industrial conglomerate's stock to "outperform", while Royal Caribbean Cruises Ltd slipped 2.9% as J.P. Morgan assumed coverage with an "underweight" rating. (Reporting by Devik Jain, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Anil D'Silva and Vinay Dwivedi)